Insurance investment outsourcing hits record $4.5trn as insurers expand further into private markets

Written by Adam Cadle

21/05/2025

Insurance investment outsourcing has almost tripled to a record $4.5trn over the last decade, according to latest figures published by Clearwater Analytics, with private asset class AuM surging from less than $50bn to over $800bn.

In its annual 2025 Insurance Investment Outsourcing Report (IIOR), Clearwater Analytics said the dramatic growth in insurance investment outsourcing reflects several market forces, including the need for specialised expertise in merging asset classes, the search for yield in a challenging market environment, and structures and asset classes that address increased regulatory complexity. These factors have created an unprecedented demand for sophisticated investment management technology platforms capable of handling complex multi-asset portfolios.

At a top-level view, 79% of insurance AuM is publicly traded assets, with 21% now held in private assets.

Public fixed income still comprises 68% of reported insurance AuM, but private fixed income now accounts for 14%, showing insurers are gradually diversifying from traditional assets. Corporate bonds make up 37% of public fixed AuM while cash/government/agency assets make up 20%.

Public equities account for only 11% of total insurance AuM, and private equity and equity alternatives make up 6.9%. Twenty-eight per cent of private equity-alts AuM is allocated to real estate equity, 35% is in private equity and venture capital and 39% of private equity-alts AuM is in private equity-alts broadly.

Managers still dominating the charts include BlackRock, PGIM, Invesco and State Street, however, there is a growing contingent of specialist managers, generally focused on private market strategies. The presence of multi-asset specialists such as Wellington, Schroders and Conning is increasing, reflecting growing insurer appetite for customised mandates that blend private and public exposures.

Geographically, managers headquartered in EMEA are increasingly offering private fixed income, implying European insurers may be leaning into higher-yielding illiquid assets despite traditionally conservative regimes. Insurers in Europe are also likely using consultants to enter new asset classes, including infrastructure debt and real assets.

US companies with global footprints dominate when it comes to APAC-insurance mandates.

Over 80% of participating investment managers in the research said they now provide customised portfolio reporting, cash flow projections, accounting analytics, and regulatory assistance – all powered by advanced technology solutions.

“Insurers are increasingly leveraging external managers for both traditional fixed income and complex alternative assets, including private credit—a shift that was barely visible five years ago. The IIOR serves as a key resource for insurers to identify and research managers with the expertise, asset class strategies, and related services and technology needed to support their investment operations,” said Steve Doire, owner of DCS Financial Consulting and strategic adviser to Clearwater.

The 2025 IIOR provides detailed profiles of over 100 investment managers and consultants, emerging investment strategies across public and private markets, and expert perspectives on the market’s evolution.

Related Articles