A new survey by Goldman Sachs Asset Management (GSAM) reveals that despite persistent inflation concerns, insurers are increasing their investment in private assets, particularly private credit. The results, from GSAM’s 14th annual global insurance survey, reflect optimism about asset diversification even amidst broader economic challenges.
According to the survey, 58% of insurers plan to boost their allocations to private credit over the next year, a trend that continues despite the ongoing inflationary pressures and slowing economic growth. This shift in investment strategy comes as insurers look for ways to navigate the uncertain macroeconomic environment.
Inflation remains a significant concern for insurers, with 52% of respondents identifying it as a major macroeconomic risk to their investments, up from 42% in 2024. This marks a return to levels seen in 2023, underscoring the growing impact of rising prices on the global insurance sector.
The GSAM survey, conducted between January and February 2025, polled 405 chief financial officers and chief investment officers from the insurance industry. The participants represent insurers with combined assets totaling US$14 trillion, about half of the global insurance sector’s total balance sheet. The survey sought insights into economic conditions, asset allocation trends, and investment strategies.
Mike Siegel, global head of insurance asset management and liquidity solutions at GSAM, noted that insurers are adapting to macroeconomic challenges by rotating into asset classes offering strong risk-adjusted returns and diversification. “This evolving strategy highlights emerging trends in liquidity management,” Siegel said.
Beyond inflation, insurers are most concerned about the economic slowdown in the US, with 48% citing a potential recession as a risk. Other significant threats include market volatility (47%), geopolitical tensions (43%), and trade disputes (32%).
“As investors await greater clarity on policy, many are grappling with the dual challenge of rising inflation and slower economic growth in the US,” Siegel explained.
However, the outlook for the US Treasury yield remains stable, with 76% of insurers expecting it to stay between 4% and 5% through 2025. While there are cautious views on the Eurozone and China, Siegel emphasized that there are still attractive investment opportunities for those looking to improve risk-adjusted returns.
In terms of expected returns, insurers are most bullish on private assets, with private credit topping the list for the second year in a row. According to the survey, 61% of insurers believe private credit will provide the highest total return over the next 12 months. US equities (57%) and private equity (55%) follow closely, with private equity secondaries (30%) and high-yield debt (28%) also highlighted as strong contenders.
GSAM’s Matt Armas, global head of insurance, forecasts continued expansion in the private credit market in 2025. He believes insurers will have ample opportunities to diversify their portfolios while seeking attractive returns through this growing sector.
Overall, insurers are navigating an increasingly complex landscape, balancing inflationary pressures, market volatility, and economic uncertainties by shifting towards private assets and exploring new investment opportunities.
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