Opportunity Amid Uncertainty: Embracing A More Flexible Approach

Introduction

Welcome to the 2025 edition of BlackRock’s Global Insurance Report (GIR). We extend our gratitude to the 463 insurance investment professionals from 33 countries who participated in this year’s survey, covering $23 trillion in insurance AUM, making it our most robust snapshot of a dynamic industry undergoing significant change.

The 2025 investment landscape has presented insurers with a mix of macroeconomic and policy headwinds, alongside heightened market volatility. Yet, this uncertain environment also creates opportunities, particularly for sophisticated insurance investors who are well-positioned to navigate market dislocations and capitalize on structural shifts. Highlighted by survey responses, insurers are increasingly open to adjusting their operating models by forming strategic partnerships with managers to enhance investment returns and strengthen capital management. Separately, AI has emerged as a key focus area, viewed as a valuable tool for improving investment selection and risk underwriting.

In the 2025 Global Insurance Report, we share key insights, survey findings, and our perspectives across four areas:

• Macro and Market Outlook
• Investment Strategy
• Operating Models & Technology
• Sustainability & Transition

Our goal is to help you navigate uncertainty and identify actionable opportunities for your business.

Macro and Market Outlook

Serious Macro Risks Remain
Inflation has resurfaced as the top macro risk, cited by 63% of insurers surveyed in 2025. The top five risks remain consistent with the previous two years, though their order has shifted. Notably, recession risk has moved to the lowest of the top five.

Risk Appetite Remains Low
From 2018 to 2021, surveyed insurers' appetite to increase risk ranged from 28% to 60%. However, in light of the macro risks cited above, this appetite has significantly declined, falling to 19% in 2022 and further to 12% in 2024 and 2025.

Investment Strategy

Appetite for Public Assets Remains Healthy
Public assets continue to be the most important allocation for insurers globally, with 21% of those surveyed planning to increase allocations compared to 6% who plan to decrease. However, the appetite to increase allocations to public assets has declined over the past couple of years, reaching all-time lows of 20% in 2024 and 21% in 2025, despite the higher rate environment.

Appetite for Private Assets is Persistently High
In contrast to the decreased appetite for risk and public market allocations, the demand for private assets remains high. 30% of insurers surveyed plan to increase allocations compared to 12% who plan to decrease. The survey responses from 2018 to 2025 indicate a secular shift in appetite for private assets, independent of the rate cycle.

Additionally, the appetite for private markets is strong across all insurance types and regions, though it is lower in APAC.

Within private markets, the interest in single strategy direct lending (39%), special situations/opportunistic (38%), and infrastructure debt (37%) were the most commonly cited. The appetite for multi-alternative strategies also remains high (50%), which is particularly helpful for insurers without the scale or expertise to manage single strategies. Conversely, insurers sought to decrease allocations to private equity (24%), real estate equity (21%), and real estate debt (20%).

Operating Models & Technology

More Open and Flexible Asset Management Models
87% of respondents indicated that they are changing their asset management operating model. This includes 53% moving from a fully in-house model to a hybrid model, 24% from a fully outsourced model to a hybrid model, 6% from a fully outsourced model to a fully insourced model, and 5% from a fully in-house model to a fully outsourced model.

One catalyst for this change is insurers seeking to access private debt through various approaches, including enhancing in-house capabilities inorganically (20%), forming JVs or strategic partnerships with third-party managers (19%), enhancing in-house capabilities organically (13%), outsourcing to third-party managers (11%), and a combination of approaches (37%).

Increased Usage of Capital Management Strategies
We observe that insurers are being more proactive in their capital management. 67% of insurers seek to utilize reinsurance sidecars, 54% seek to leverage third-party capital, and 53% plan to expand or enhance their captive insurance/reinsurance capabilities.

Investment in and Expansion of Operational and Technology Capabilities
The most common operational focus areas cited were Integrated Asset and Liability Management (ALM) (62%), Risk Management (55%), and Compliance with Regulatory and Reporting Requirements (40%).

Insurers are leveraging technology for use cases such as Inflation Risk Monitoring (48%), Private Asset Modeling (44%), and Regulatory Capital Integration (42%).

They are investing in AI-related software and technologies (73%), portfolio and risk management software/platforms (70%), and liability/analytical tools (56%). The specific use cases for AI most cited were security selection and evaluating investment opportunities (70%) and insurance risk underwriting (68%). This reflects the growing emphasis on AI and technology, driven by the exponential increase in the availability of public, private, and non-traditional data.