Insurance companies remain cautious as inflation once again emerges as one of the leading macroeconomic risks, according to BlackRock’s 14th annual Global Insurance Report.
BlackRock, the asset manager, surveyed 463 senior investment professionals across 33 markets representing a combined US$23 trillion in assets under management.
The findings highlight an industry balancing prudence with selective pursuit of new investment opportunities across both public and private markets.
While risk appetite remains subdued, with only 12% of insurers intending to increase their overall investment risk exposure in 2025, allocations to private markets continue to grow.
Nearly one-third (30%) of insurers plan to increase allocations to private assets, and 58% intend to maintain their current exposure. According to BlackRock, 79% of respondents anticipate a modest change in their private markets exposure of between 1% and 5% over the next year, while 13% expect an increase of 6–9%, and 1% foresee a change of 10% or more.
These shifts, influenced by market conditions and asset allocation strategies, signal an ongoing move towards private assets across rate cycles. Private credit, infrastructure and multi-alternative strategies were the most frequently cited areas of opportunity.
BlackRock’s report also shows that public markets remain a cornerstone of insurers’ portfolios. Seventy-three percent of respondents plan to maintain their current allocations, and 21% expect to increase them.
The firm notes that insurers are not only addressing short-term volatility but also reshaping portfolios for sustained competitiveness. Many are revisiting their investment approaches and operating models, with private credit, infrastructure and technology viewed as key tools to support strategic priorities.
A notable theme in this year’s findings is the shift towards more flexible operating models. BlackRock reports that 87% of insurers are changing their approach to asset management. Rather than relying exclusively on internal capabilities, many are adopting hybrid models that combine in-house expertise with external partnerships, supported by continued investment in technology.
The report also highlights a growing emphasis on capital management across the insurance sector. Over the next 12 months, 67% of insurers expect to make use of reinsurance sidecars, 54% plan to increase reliance on third-party capital, and 53% intend to expand their captive management capabilities.
According to BlackRock, this focus reflects a broader effort to diversify balance sheet income through fee-based revenue, optimise capital structures, and access non-dilutive sources of funding.
Insurers remain committed to their long-term sustainability and transition investment objectives. For the second consecutive year, clean energy infrastructure (55%) was identified as the most attractive opportunity for sustainable and transition investing, followed by core infrastructure (51%) and green bonds (38%), according to BlackRock’s findings.
“The story of 2025 is one of caution amid volatility, but also of conviction in the long-term opportunities private markets can offer,” commented Mark Erickson, Global Insurance Strategist of BlackRock’s Financial Institutions Group.
“Insurers are navigating the environment with discipline while many are embracing new operating models, such as hybrid solutions to access private assets, and adopting investment, risk, and AI software to strengthen their portfolios.”
Charles Hatami, Global Head of the Financial & Strategic Investors Group and Co-Head of the Global Partners Office at BlackRock, added: “Insurers are sophisticated allocators across public and private markets, operating in a highly competitive and regulated environment.
“Today, we’re witnessing an accelerated transformation, particularly among life insurers, toward long-term private capital deployment, especially in areas like private credit and infrastructure. Their deep expertise, disciplined approach, and long-term investment horizon uniquely position them to offer valuable perspectives to other institutional investors navigating similar challenges.”
The post Insurers prepare for another year of uncertainty, says BlackRock appeared first on ReinsuranceNe.ws.