Escalating inflation has returned as the top concern for the world’s insurers, outstripping geopolitical and regulatory risks, according to research from BlackRock.
The asset manager’s Global Insurance Report covering participants in 33 countries with a total of USD23 trillion in assets under management, finds 63 per cent of insurers cite inflation as the most serious macro consideration.
Half of those surveyed say rising geopolitical tension and fragmentation is their major concern, while 42 per cent say the higher rate environment and 40 per cent point to regulatory developments.
In an environment punctuated by tariff uncertainty and ongoing global conflicts, insurers are showing a more cautious stance toward risk over the next 12 months, with only 13 per cent of respondents planning to increase their risk exposure.
Among the slim number of insurers planning to boost risk there are two primary drivers: the pursuit of higher returns and the desire to capitalise on new strategies and market opportunities. These remain the top reasons for a “risk-on” approach, with 63 per cent and 60 per cent of respondents ranking them as their leading motivations.
Public rather than private markets will be the asset allocations of choice for insurers, according to the research.
While investment in public assets continue to be the most important allocation for insurers globally, with 21 per cent planning to increase allocations compared to 6% who plan to decrease.
However, based the appetite to increase allocations to public assets has declined over the past couple of years, reaching all-time lows of 20 per cent in 2024 and 21 per cent in 2025, despite the higher rate environment.
Meanwhile, the demand for private assets remains high. 30 per cent of insurers surveyed plan to increase allocations compared to 12 per cent 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.
Mark Erickson, Global Insurance Strategist of BlackRock’s Financial Institutions Group, says: “The story of 2025 is one of caution amid volatility, but also of conviction in the long-term opportunities private markets can offer. 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.”
Insurers are focused not only on navigating current market volatility, but also on positioning their portfolios for long-term competitiveness.
Blackrock reports that 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.
Charles Hatami, Global Head of the Financial & Strategic Investors Group and Co-Head of the Global Partners Office at BlackRock, says: “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.”
