20 years on: evolving in tandem

PNC’s modern approach helps organisations holistically see a better future, as Wade Meadows of PNC Institutional Asset Management explains.

A lot can change in 20 years. Then, our world was just being introduced to Facebook and saying goodbye to cultural icons such as Friends. The national average price of a gallon of gasoline hovered around $2 and a loaf of bread was only $1.

In other words, life has changed pretty drastically since 2004. And the same can be said for PNC, which 20 years ago was on the cusp of a significant period of growth. Since 2004, PNC has made strategic acquisitions of financial institutions such as Riggs Bank, National City, RBC Bank USA, and BBVA USA, which have exponentially grown its customer base and helped propel the bank from one with a more regional focus to the national presence it has today.

PNC’s growth has not been limited to its brick-and-mortar footprint. It has included an evolution of product and service offerings that have touched all parts of the bank—including the captive insurance and advisory solutions offered through its Institutional Asset Management (IAM) business.

"Enterprise financial modelling eliminates ‘one size fits all’ solutions, with flexible and tailored investment strategies." Anjanette Fowler

Much like PNC as a whole, PNC IAM looks quite different after two decades. While 20 years ago, IAM may have offered a solution set to captive insurance clients that focused primarily on high-grade fixed income solutions through PNC Capital Advisors, today we provide a full suite of investment management, banking and treasury management solutions. We’ve added services and capabilities, including enterprise financial modelling and Outsourced Chief Investment Officer (OCIO) products to provide clients with forecasting, convenience and adaptability to get the most out of their investments.

PNC’s captive insurance team has also grown from one to more than 15 dedicated chartered financial analysts and actuaries who serve a portfolio of nearly 300 clients and $21 billion in assets under management and administration.

PNC as a whole has experienced very good growth over the last 20-plus years, and what has happened in the insurance asset management space has mirrored that. Our product set has evolved significantly in an effort to provide our captive insurance clients with the tools to efficiently and effectively manage their portfolios.

OCIO services

PNC offers OCIO services across all institutional sectors, but with specialised capabilities for captives. PNC’s OCIO model is a four-step repeatable process that includes:

1. Identifying goals and projections;

2. Analysing enterprise risk;

3. Building a custom investment strategy that accounts for financial goals while balancing risk appetite; and

4. Implementing the solution while monitoring performance metrics.

PNC’s OCIO offering has helped to take the pressure of the day-to-day management of an investment program off the asset owner and put that responsibility in the hands of a PNC investment advisor.

OCIO solutions have helped PNC clients reduce costs, better allocate resources, participate in more sophisticated investment strategies and more accurately report on results.

The result has been that investment management services formerly available only to large commercial insurers are now accessible to PNC’s captive insurance clients.

“While OCIO as a concept is not new, our focus over the last few years has helped our clients realise cost savings and risk controls that were previously only available to much larger organisations,” says Chris McGoldrick, head of PNC’s OCIO offering.

Enterprise financial modelling

Hand in hand with the OCIO services, PNC now offers institutional clients an enterprise financial modelling framework that helps inform investment strategy based on its clients’ individual goals and risk appetite. Enterprise financial modelling eliminates “one size fits all” solutions, with flexible and tailored investment strategies.

PNC’s enterprise financial modelling framework begins with a conversation around organisational goals, risk, peer review and the overall impact the organisation’s investment programme has on financial health. It includes analysis of potential
impacts of various asset allocation strategies and market volatility on the company’s financial outlook. Clients are then presented with a customised asset allocation recommendation that balances organisational goals within the established risk constraints. As the plan is implemented, continuous oversight and as-needed adjustment occurs to continually meet the client’s goals.

“Decisions that are being made today will impact the financial outcomes for insurance companies for the next 20 years,” says Kimberlene Matthews, managing director of pension and enterprise solutions at PNC IAM.

“Enterprise financial modelling is helping us better project how decision-making will impact results so that we can create effective, custom solutions for our clients.”

The next 20 years … and beyond

PNC is not the same bank as it was in 2004. While the commitment to clients, shareholders and communities has not changed, new technologies and fresh ideas have helped drive continual innovation that better pairs expert advisory and forecasting services to its traditional PNC Capital Advisors product set. It’s an effort that has resulted in PNC’s being recognised as a top OCIO provider by Pensions and Investments magazine.

The work doesn’t stop, however. It’s vital to look at the next 20 years as an opportunity to continue building the best team with new and innovative solutions for a captive insurance industry with unique and evolving challenges.

“We can be proud of the work, innovation and partnership that have helped PNC grow and serve our clients in the captive insurance space over the last few decades,” says managing director Anjanette Fowler. “But we know this industry will continue to evolve and we must grow with it, so that the next 20 years are as impactful as the last.”

Wade Meadows is head of the insurance and specialised industries group at PNC Institutional Asset Management. He can be contacted at: wade.meadows@pnc.com