BlackRock: Insurers to ramp up investment in private markets

91 per cent of global insurers are planning to increase their allocations to private markets over the next two years, with opportunistic private debt, private placements and direct lending among the most popular segments.

BlackRock surveyed 410 insurance investors globally, representing nearly $27tn (£20.6tn) in assets under management.

For the third year running, the annual report showed that a majority of insurers are planning to invest more in private markets, citing categories including opportunistic private debt (41 per cent), private placements, (40 per cent), direct lending (39 per cent), and infrastructure debt (34 per cent).

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The asset manager noted the widening scope of private debt and said its report indicates this asset class can support insurance investment objectives for those needing long-term assets to support long-term liabilities, as well as increasing investment income through illiquidity rather than other investment characteristics.

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“We’ve seen rapidly accelerated demand for private markets among insurers in recent years, given these investments’ dual benefits of diversification and increased income generation,” said Mark Erickson, global head of BlackRock’s financial institutions group.

BlackRock’s survey also found that 99 per cent of insurers have set a low-carbon transition objective within their investment portfolio, with 57 per cent citing the mitigation of climate risk as a motivating factor.

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