APAC insurers are planning to significantly increase private market and hedge fund holdings from 20% to 33% of portfolios within five years, but face significant operational challenges that could determine competitive winners and losers, new research from Clearwater Analytics has revealed.
Two of every five insurance executives (41%) said there are increased complications from a legal and compliance perspective from investing in private markets, while 29% said viewing private market assets alongside traditional assets is challenging. Nine in 10 (91%) said their technology systems are very or quite effective at processing new asset classes, while 92% said it is very easy or quite easy to determine fair value for private market assets.
A key driver for the switch to private markets is increased diversification, with 88% expecting diversification to increase over the next three years. Third-party managers have the strongest expectations for diversification, with 30% saying it would increase dramatically, compared to 10% of life/health insurers and just 4% of general insurers.
An overwhelming majority (93%) agree that the most attractive investment opportunities for investors currently are in the private markets and not the public markets, with 37% strongly agreeing with that view.
“APAC insurers are firmly convinced how attractive investing in private markets, which have produced consistently attractive returns for their portfolios,” said Shane Akeroyd, chief strategy officer and President of Asia Pacific at Clearwater Analytics.
“That is reflected in the forecasts about rising allocations to private markets and the recognition that many of the most attractive investments are in that sector. However, operational concerns have to be addressed by insurers.
“Legal and compliance concerns are seen as the biggest issue, but insurers also need to assess private markets alongside traditional assets and require technology and platforms to support them.”
Clearwater Analytics commissioned independent research agency PureProfile to interview 150 senior executives working for the asset management arms of life/health insurers and general insurers based in APAC or third-party investment firms working for APAC life insurance carriers. The research was conducted in October 2025 in Australia, Hong Kong, and Singapore.
