Private market investments surge amongst 73% of insurers

Optimising fixed income portfolios amongst prime investment opportunities for insurers in the next 12 months.

About 73% of insurers currently invest in private markets or plan to do so in 2024, while 39% intend to increase their private market allocations, MarshMcLennan reported.

Notably, 32% of insurers also intend to increase asset allocations to private debt this year, up from 27% in 2023.

MarchMcLennan surveyed 80 insurers globally on their investment and portfolio positioning plans for 2024 and beyond.

Over the next 12 months, insurers see prime investment opportunities in optimising fixed income portfolios, highlighted by 60% of surveyed firms. This trend is strongest in the US (71%), with Europe and Asia both at 63%.

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Diversifying portfolios beyond traditional assets is the second top opportunity, noted by 51% of firms, particularly strong in Europe (75%), Canada (58%), and the US (53%).

Enhanced cash management ranks third, supported by 40% of firms, with the highest interest in the US (59%) and Europe (47%).

Meanwhile, increasing private market allocation is most favored in the UK and Canada at 50%, followed by the US (41%) and Asia (38%).

Utilizing illiquidity as a return driver is prevalent in Canada at 50%, while embedding ESG criteria is a key focus in Europe at 40%.

In addition, Asia is keen on diversifying credit exposure, including high yield and emerging market debt, at 50%, while Canada, Asia, and the UK are each seeking sustainability and climate solutions at 25%.