Insurers in North America are increasingly allocating their investments to private credit markets, specifically private debt.
The main motivations behind this shift are diversification, lower volatility, the opportunity to invest in new asset classes, income enhancement, and meeting portfolio climate targets.
Insurers are selecting private asset classes that align with their liabilities and improve overall investment performance. Private assets provide access to unique opportunities not readily available in public markets and help mitigate portfolio volatility.
Partnerships between insurers and alternative investment managers are on the rise, allowing insurers to tap into specialized expertise and innovative strategies.
The evolving regulatory landscape also plays a crucial role in compliance and risk management.
The findings from BlackRock's survey highlight the global nature of this trend, with respondents from various regions indicating a collective movement towards private market investments.
As insurers continue to navigate the financial markets, their strategic focus on private credit and other private market assets is likely to reshape the investment landscape.