Perception A: Insurers set to increase allocations to alternative asset classes

Perception A: Insurers set to increase allocations to alternative asset classes

18 januari 2024

Asset Allocatie Verzekeraars
Asset allocatie (01)

Insurers and insurance asset managers are set to continue to increase their allocation to alternative asset classes over the next three years.

According to a new survey among investment management professionals in Life Insurance companies, London Markets (re)insurers and at insurance investment managers, 89% of those surveyed believe this, with 13% expecting a dramatic increase.

Some 73% of those surveyed said this is because there is now greater transparency and reporting around investing in alternatives, and this is followed by 62% who believe it is due to there being more investment choice in the sector.

The study, from Ortec Finance, the leading global provider of risk and return management solutions for insurers and other financial services companies, found that 59% said insurers and insurance asset managers will increase their allocation to alternatives because they offer a good way to diversify portfolios, and 20% said it was primarily because they offer good yields.

In terms of which alternative asset classes insurance investment management professionals plan to increase allocations to over the next two years, 73% expect an increase to direct real estate investment, and 69% and 66% expect allocations to private equity and hedge funds respectively to rise.

One consequence of the increased focus on alternatives is that the level of direct investing from insurers and insurance asset managers rather than fund investing - is set to rise. Over the next five years, 16% of respondents to Ortec Finance’s survey expect a dramatic increase in this from insurers and insurance asset managers, and a further 79% anticipate a slight rise.

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