BlackRock Global insurance report 2017

Battling the big squeeze: How insurers are protecting profitability

In recent years, some insurers’ profits have suffered as they navigated historically low interest rates and challenging new regulatory and accounting rules. BlackRock's sixth annual report on the industry – 'Battling the big squeeze: How insurers are protecting profitability' – reveals that, for many, years of changes in areas such as underwriting and operating cost reductions have not increased profitability as much as hoped.

The results of the survey, which was conducted by the Economist Intelligence Unit, show insurers rethinking their investment portfolios as a vital step toward improving future profitability.

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Key findings from a survey of 300 global insurance executives:

Infographic showing that as market, macro and regulatory forces squeeze insurers, they are looking to optimise their investment portfolios to support profitability.

Insurers’ anxieties over macro and market risks are at multi-year highs.

Infographic showing insurers’ anxieties over macro and market risks are at multi-year highs, with 71% of insurers concerned about geopolitical risk, 74% concerned about asset price volatility, 74% concerned about liquidity risk, and 43% think regulation is hampering their ability to improve returns.

Insurers are reluctant to increase their investment risk budget but see opportunities to optimise its underlying components.

Infographic showing insurers reluctant to increase risk budget but rather optimise its underlying components. 79% plan to maintain current risk profile and 70% agree there is room to manage risk and consume capital more efficiently.

Insurers envision a more prominent role for non-traditional asset classes.

Infographic showing insurers envision a more prominent role for non-traditional asset classes with 67% of insurers agreeing that rethinking their portfolios will be key to improving profitability, and 84% agreeing that embracing private assets will be key to improving profitability.