BlackRock: insurers brace for impact as uncertainty rises

Insurers are bracing for another year of uncertainty, with inflation once again cited as one of the top macroeconomic risks, according to BlackRock’s 14th annual Global Insurance Report.

The report surveyed 463 senior investment professionals across 33 markets—representing $23 trillion in assets under management—shows a sector adapting with caution, but also seizing opportunities in both public and private markets, and increasingly using captives.

BlackRock said that even as risk appetite remains low - just 12% of insurers plan to increase their overall investment risk exposure in 2025 - allocations to private markets continue to rise. Nearly a third (30%) of insurers expect to increase private allocations with 58% intending to maintain their current exposure. 79% of respondents expect their private markets exposure to change by 1 to 5%, 13% anticipate a change between 6 and 9%, and 1% expect a change of 10% or more over the next 12 months, influenced by market movements and asset allocation over the next 12 months, signalling the continued structural shift toward private assets that has persisted across rate cycles. Private credit, infrastructure, and multi-alternative strategies remain the most cited opportunities.

At the same time, public markets remain foundational to portfolios: 73% of insurers plan to maintain their current allocations and 21% plan to increase them.

“The story of 2025 is one of caution amid volatility, but also of conviction in the long-term opportunities private markets can offer,” said 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.”

As the report highlights, insurers are focused not only on navigating current market volatility, but also on positioning their portfolios for long-term competitiveness. Many are rethinking their investment strategies and operating models. Private credit, infrastructure and technology continue to serve as useful tools to support insurers’ strategic initiatives.

“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,” said Charles Hatami, global head of the Financial & Strategic Investors Group and co-head of the Global Partners Office at BlackRock.

BlackRock said that a defining feature of this year’s report is the shift toward more flexible operating models. As the competitive and market dynamics continue to evolve, insurers are adapting. Regarding their asset management operating model, 87% of insurers are changing their approach. Rather than solely relying on their in-house capabilities, many are adopting hybrid models that combine their internal expertise with external partners, supported by major investments in technology.

In addition, BlackRock said that it has observed a growing emphasis on capital management across all types of insurers. Over the next 12 months, 67% anticipate utilising reinsurance sidecars, 54% expect to increase their use of third-party capital, and 53% plan to expand their captive management capabilities. This heightened focus on capital management is largely driven by insurers’ need to diversify balance sheet income through greater fee-based revenue, optimise balance sheets and capital structures, differentiate asset mixes via sidecars, and access non-dilutive sources of capital.

Insurers also remain committed to their long-term sustainable and transition investing goals. For the second year in a row, insurers most commonly cited clean energy infrastructure (55%) as the most attractive opportunity for sustainable and transition investing, followed by core infrastructure (51%) and green bonds (38%).

The full 2025 Global Insurance Report, including regional insights and commentary from industry leaders, is available for download here.

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