Smaller life and property and casualty insurers are more likely to use external asset managers to handle their portfolios, according to data compiled by S&P Global Market Intelligence.

The P&C sector shows significant contrasts when comparing insurers that use in-house management versus employing unaffiliated asset managers. As of Dec. 31, 2016, a larger proportion of P&C companies tended to farm out a greater amount of their assets under management to non-affiliated companies than life insurers, but the P&C sector also includes the largest proportion of companies that use no external managers at all.

The most popular investment method across both sectors was for insurers to use external managers for less than half of their invested assets. That strategy is preferred by the largest proportion of life insurers across the board, and for P&C companies in three of the four industry quartiles, as broken down by the size of net admitted cash and invested assets.

Infinity Property & Casualty Corp. uses external asset mangers for most of its investment assets. The company employs a conservative investment approach, CFO Rob Bateman said recently. The insurer is changing its strategy, which had been a sector-based approach with three managers, Bateman said Sept. 7 during remarks at the Keefe Bruyette & Woods Insurance Conference.

"We are moving to more of a dual-mandate approach where we will have two investment managers with similar mandates," he said, according to a transcript. With that change, the insurer expects to both lower investment expenses and improve returns on its investments, Bateman said. As of Dec. 31, 2016, the company employed BlackRock Inc., State Street Global Advisors Inc., Vanguard Group Inc. and Wellington Management Co. LLP.

Among the biggest P&C insurers, Berkshire Hathaway Inc. and CNA Financial Corp. use no unaffiliated managers for their portfolios. Conversely, American International Group Inc. and Chubb Ltd. each use external managers for more than half their investment assets.

In the life insurance sector, Lincoln National Corp. contracts out all of its investment management, CEO Dennis Glass said during a Sept. 12 presentation at the Barclays Global Financial Services Conference. Glass called the practice unique in the industry and said it allows the company to focus its resources on strategic matters. The company has reduced the number of managers for its general account recently, he added.

"At the margin, we have improved net investment income with those ... actions," Glass said, according to a transcript.

Lincoln has used the asset management services of JPMorgan Chase & Co., Goldman Sachs Group Inc. and BlackRock, Glass said. As of Dec. 31, 2016, the company also contracted with Delaware Investment Advisors, Prudential Financial Inc. and Hamilton Lane Advisors LLC, according to a regulatory filing.

Elsewhere among major life insurers, Prudential Financial and TIAA use no external management for their investment assets, while Sammons Enterprises Inc. and Genworth Financial Inc. use outside managers for more than half their assets.