Insurers shift portfolios towards private markets amid uncertainty
Nearly a third of insurers expect their private market allocations to increase this year, with credit, infrastructure, and multi-alternative strategies the main areas of interest, a new report has revealed.
US asset manager BlackRock’s 14th annual Global Insurance Report, published today (21 October), surveyed 463 sector professionals representing $23tn (£17.2tn) in assets under management.
Despite risk appetite remaining low as inflation concerns have risen, 30 per cent of insurers expect to increase their private market allocations, with 58 per cent intending to maintain their current exposure, the report found. It also stated that private credit, infrastructure, and multi-alternative strategies remain the most-cited opportunities.
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“Today, we’re witnessing an accelerated transformation, particularly among life insurers, towards long-term private capital deployment, especially in areas such as private credit and infrastructure,” said Charles Hatami, global head of the financial and strategic investors group and co-head of the global partners office at BlackRock.
Overall, 79 per cent of respondents expect their private market exposure to change by one to five per cent, 13 per cent anticipate a change between six and nine per cent, and one per cent expect a change of 10 per cent or more over the next 12 months, the report stated.
BlackRock said that the increasing shift towards private markets, including asset classes such as credit, comes as insurers try to navigate current market volatility and position their portfolios for long-term competitiveness. The report also found that inflation tops insurers’ current risk concerns at 63 per cent.
Read more: Insurers’ exposure to private credit market raises questions
As many insurers reposition their portfolios and rethink their strategies in this evolving market, private credit, infrastructure, and technology are helping to achieve these aims, BlackRock said.
Overall, the US manager found that, with regard to their asset management operating model, 87 per cent of insurers are changing their approach.
“The story of 2025 is one of caution amid volatility, but also of conviction in the long-term opportunities private markets can offer,” added Mark Erickson, global insurance strategist at BlackRock’s financial institutions group.
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