Viewpoint: Investment Risk Survey - Insurer Optimism Cools on Markets, Adding Risk
In Short
By Matt Reilly, Head of Insurance Solutions
U.S. insurers appear to remain generally optimistic about investment conditions for 2025 (see Figure 1) and expect to continue to take on more investment risk, according to a recent survey of 310 investment decision makers in the U.S. insurance industry commissioned by Conning.
The recently completed election sea- son also seems to be weighing on in- surers’ minds as the domestic political environment was the top portfolio con- cern of 10 choices listed, even though the survey was conducted after the No- vember 2024 elections. Portfolio yields and market volatility were tied as the second greatest concern. Inflation, which had ranked as the top concern in Conning’s previous three investment risk surveys, fell to seventh among re- spondents.
Insurers continue to express interest in private assets and expect their current exposures to grow. The bulk of respon- dents - 71% - currently have between 5% and 20% in private assets. In two years, a majority - 63% - expect to have between 10% and 25% in private assets.
The majority of respondents also said they expect to maintain or increase du- ration in 2025 as well as exposure to floating-rate assets, and almost all are confident they can meet the liquidity demands of their business.
Optimism, Less Inflation Concern, Comfort with Liquidity
Overall, the respondent group remained optimistic regarding the investment environment in 2025, although as Figures 1 shows the optimism has slipped a few points since the last survey and pessimism has risen slightly. For the third year in a row, the majority of respondents also said they expect to increase their investment risk in the year ahead (see Figure 2), although their inclination has been easing over the past three surveys. Respondents with the larg- est firms were the least likely to increase risk and the most likely to decrease investment risk. Those outsourcing asset management were also more likely to decrease investment risk than those managing assets internally.
Figure 1 - Optimistic About 2025 Investment Environment
Is your firm optimistic, pessimistic or uncertain about what to expect in terms of the investment climate in the year ahead?
Prepared by Conning, Inc. Source: ©2025 Conning, Inc. The Conning U.S. Insurers Survey – Investment Focus utilized survey technology provided by Qualtrics, LLC.1 Results may not be representative of any one respon- dent’s experience as they reflect an average of all, or a sample of all, of the experiences of surveyed U.S. insurance company decision makers.
Figure 2 - Expect to Take on More Investment Risk
Prepared by Conning, Inc. Source: ©2025 Conning, Inc. The Conning U.S. Insurers Survey – Investment Focus utilized survey technology provided by Qualtrics, LLC.1 Results may not be representative of any one respondent’s experience as they reflect an average of all, or a sample of all, of the experiences of surveyed U.S. insurance company decision makers.
A major change in the leading portfolio concerns during the next two to three years among respondents was the significant decline in inflation worries, which had been the top concern among respondents the past three surveys (and remained the primary worry for the smallest firms). Of a list of 10 portfolio concerns, the domestic political environment was first, followed by investment yields and market volatility (tied), geopolitical events and the impact of artificial intelligence/model risk (see Figure 3).
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About Conning
Conning (www.conning.com) is a leading investment management firm with a long history of serving insurance companies and other institutional investors. Conning supports clients with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America. Conning is part of the Generali Group.
Footnote:
1 In 2024, surveys were sent to approximately 2,000 U.S. insurance company investment professionals and yield 310 responses. In 2023, sur- veys were sent to approximately 2,000 U.S. insurance company investment professionals and yielded 300 responses. In 2022, surveys were sent to approximately 4,000 U.S. insurance company decision makers with 303 qualified responses. 2021 survey was sent to approximately 7,000 U.S. insurance company decision makers with 280 qualified responses. Qualtrics, LLC was paid a fee for services rendered.
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