Insurers Further Embrace Private Assets, Especially Private Credit

Approximately 62% of insurers plan to increase their private markets allocations, according to a survey of insurance CIOs conducted by Goldman Sachs.

Insurance investors have leaned further into private assets in the last several years, and they are expected to embrace alternatives even further in 2025, according to a survey of insurance investors conducted by Goldman Sachs Asset Management.

Based on the report on the firm’s 14th annual global insurance survey, “The Great Pivot,” approximately 62% of surveyed CIOs and chief financial officers of insurance companies plan to increase their firms’ allocations to the private markets this year, with private credit expected to be a driver of returns for the rest of the year.

GSAM surveyed 338 insurance CIOs and senior investment professionals, 53 CFOs and 14 individuals who serve in both roles. Survey participants represented more than $14 trillion in assets under management, about half of all global insurance AUM. The survey was conducted between January 16 and February 7.

“Our 14th Annual Global Insurance Survey shows insurers are navigating evolving macroeconomic concerns by rotating toward asset classes with the potential to provide both attractive risk-adjusted returns and diversification benefits,” said Mike Siegel, GSAM’s global head of insurance asset management and liquidity solutions, in a statement. “Amid this industry-wide rotation, important new trends in liquidity management may be developing.”

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According to GSAM’s research, insurance investors feel the biggest macroeconomic risk to their investment portfolios include inflation, with 52% of respondents pointing to this as a concern, economic slowdown or a recession in the U.S. (48%), credit and equity market volatility (47%), geopolitical tensions (43%) and tariffs and trade disputes (32%).

The biggest concern among investors in the Americas and in the Asia Pacific region was the risk of an economic slowdown in the U.S. European investors reported being most concerned with geopolitical tensions.

Asset Allocation and Portfolio Construction

Over the next 12 months, about 35% of survey respondents said they would maintain their portfolio allocations to private market asset classes, while 3% of respondents said they would decrease those allocations.

In the 2024 survey, 56% reported planning to increase their allocations over the next 12 months, up from 51% in the 2023 survey. In 2024, 38% said they would maintain their allocations, while 43% said they would maintain their allocations in the 2023 survey. In both 2023 and 2024, only 6% of respondents said they intended to decrease their private asset allocations.

Goldman asked insurers to what asset classes they plan to increase their allocations over the next 12 months. Four out of the five asset classes named by the most respondents were in the private markets. Approximately 58% of respondents said they plan to increase their allocations to private credit, followed by investment-grade private debt (40%), asset-based finance (36%), infrastructure debt (32%) and private equity (29%).

Only 17% of surveyed insurers said they plan to increase their allocations to U.S. equities, although more than half of insurers (57%) reported expecting the asset class to be the second-highest returning asset class over the next 12 months. Insurers also said they expect private credit to have the highest return, with 55% of respondents putting the asset class in the top spot.

Approximately 55% of investors said private equity would be the third-best-performing asset class, followed by private equity secondaries (30%) and high-yield debt (28%).

The insurers surveyed expected the worst-performing asset classes over the next 12 months to include green and impact bonds (46%), cash and short-term instruments (43%), municipal bonds (37%) and emerging market equities (31%).

Insurance investors also said they are likely to decrease their allocations to cash and short-term instruments over the coming year, with 31% of survey respondents indicating they would do so, the highest decrease of any asset class. Government and agency debt was next, with 21% of respondents indicating they would cut these allocations, followed by investment-grade corporate debt (19%), high-yield debt (17%) and real estate equity (16%).

Nearly Half Using AI

Some 48% of respondents reported using artificial intelligence in their work, an increase from the 2024 survey, in which 39% of respondents said they did, according to the survey results.

The percentage of respondents that said they are considering using AI fell to 42% in 2025 from 51% in 2024, while the percentage of respondents who said they would not consider using AI fell to 10% in 2025, from 20% in the 2024 survey.

Eighty-one percent of respondents said their company uses or is considering using AI to reduce operating costs. Other uses of AI by insurers were insurance risk underwriting (44%), marketing and client acquisition (36%) and evaluating investments (29%), according to the survey.

ESG and Impact Investing

Per the 2025 survey, 41% of respondents in the Americas said that investing based on environmental, social and governance considerations or impact investing was an investment consideration, up from 15% in 2022, with a majority of investors saying it was one of several considerations. No investors in the Americas said it was a primary consideration in its investments.

Among investors in the Europe, Middle East and Africa region, only 1% of survey respondents said ESG was not an investment consideration, while 19% said it was a primary consideration. Eighty percent said it was one of several considerations.

In Asia Pacific, ESG was considered one of several investment considerations by 89% of respondents, while 5% said it was not a consideration at all, and 6% said it was a primary consideration.