New York Life Insurance Company: Adjusting the Investment Portfolio to Market Conditions Harvard Case Solution & Analysis

In January 2007, Gary Wendlandt was concerned concerning the US economy. As Chief Investment Officer of the New York Life Insurance Company (NYLIC), he was responsible for managing a $147 billion investment portfolio. The US home market was weakening at a time when financial institutions had significant assets tied up in mortgage -backed securities and collateralized debt obligations. Wendlandt depicted his anxiety in a memo to Ted Mathas, the Chief Operating Officer of NYLIC.

New York Life Insurance Company Adjusting the Investment Portfolio to Market Conditions Case Study Solution

This would require putting more of the new cash flows of NYLIC into safer fixed income products. NYLIC had a responsibility towards its policyholders. It was the administrations duty to safeguard the longevity and fiscal strength of the business, in order that distribute payments from annuities, it might continue to pay policyholder claims, and problem dividends. Wendlandt confronted a classic risk/return tradeoff - i.e., lower current interest income to avert the higher possible risk of capital losses. How should he correct the investment portfolio of NYLIC?

PUBLICATION DATE: June 01, 2013 PRODUCT #: NA0213-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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