Most US insurers plan to increase their investment risk this year, with 76% stating investment opportunities for insurers are improving, and 60% adding they will increase exposure to asset-backed finance (ABF) as part of a private asset expansion, new research published by Conning has revealed.
The firm’s annual Insurance Investment Risk Survey showed that the reasons for US insurers increasing their investment risk were higher yields for high-quality fixed income securities, attractive investment opportunities across a variety of private markets, and growing sectors, including both digital and traditional infrastructure.
Seventy-nine per cent of respondents expect to have between 10% and 25% allocated to private assets in two years, up from an estimated 63% last year. Eighty-seven per cent of respondents list their current private asset allocations between 5% and 20% of portfolios, up from 71% who said the same last year.
The continued trend toward public and private portfolio allocation decisions was also revealed in the survey. Roughly half of respondents plan to increase allocations to private equity, private placements, real estate and infrastructure, while public market plans are in short-term securities and investment-grade public securities.
Exposure to floating-rate assets is expected to increase to 57% from 53% last year, suggesting an interest rate barbell approach will continue to prevail.
Portfolio turnover jumped from 50% in the previous survey to 73% this year with most asset managers citing eagerness to pursue tactical market opportunities or, to a lesser degree, aligning portfolios with longer-term investment goals or simply generating cash to support needs.
US insurers also cited worries around a more challenging macroeconomic environment, however, marked by higher inflation, liquidity risk and lower Fed interest rates.
Fifty-seven per cent of insurers expect inflation to increase moderately over the next 12 months.
"An increasingly complex market requires insurers to balance heightened risk awareness with the need to adapt to shifting macroeconomic expectations," said Matt Reilly, managing director, head of Conning’s Insurance Solutions group, and author of the survey report.
"Choosing the right partners, tools, and investment strategies is critical in this environment," he added.
The survey was completed in December 2025, and gathered responses from 201 US P&C and life insurance investment decision makers.
