Key Findings:

• 99% of insurers have set low-carbon transition goals within their investment portfolios.
• 60% of insurers are targeting clean energy infrastructure, such as wind and solar, as part of their transition objectives.
• 91% of insurers plan to increase investments in private assets over the next two years.

Global insurers are increasingly focused on low-carbon transition and clean energy infrastructure investments, according to BlackRock’s 13th annual Global Insurance Report. A staggering 99% of respondents have set low-carbon transition objectives within their investment portfolios, marking a significant shift toward sustainability in the insurance industry.

Private Market Surge

For the third consecutive year, insurers are planning substantial increases in private market allocations. 91% of respondents stated they will increase investments in private assets within the next two years, with the figure reaching 96% for both APAC and North American insurers. This growth in private market interest reflects the sector’s recognition of private assets as offering both diversification and higher income generation.

Mark Erickson, Global Head of BlackRock’s Financial Institutions Group, explained, “We’ve seen rapidly accelerated demand for private markets among insurers in recent years, given these investments’ dual benefits of diversification and increased income generation.”

Navigating Risks and Finding Partners

Despite a complex macroeconomic landscape, insurers remain focused on navigating political and economic uncertainties. Regulatory developments (68%) and rising geopolitical tension (61%) were named as top concerns, alongside interest rate risk (69%) and liquidity risk (52%).

To manage these risks, many insurers are turning to external partners. 40% of respondents noted the importance of partnering with investment firms that understand their business models and can help optimize risk evaluation and portfolio construction.

Clean Energy Investments to Drive Low-Carbon Transition

Nearly all insurers have committed to low-carbon transition goals within their portfolios, with 60% of respondents specifically targeting clean energy infrastructure investments like wind, solar, and energy storage. A majority (57%) cited the management and mitigation of climate risks as a key motivation, while others pointed to stakeholder interest and regulatory requirements.

Olivier Van Eyseren, Head of the Financial Institutions Group, EMEA for BlackRock said, “Insurers face unique challenges when evaluating strategic asset allocation to alternative investments, including regulatory issues, liquidity needs, and higher capital charges. An important part of our work with insurance clients is helping them navigate these short-term complexities while working toward the best possible long-term portfolio outcomes.”

Increased Conviction in Low-Carbon Investments

The report found a notable increase in confidence toward low-carbon investments, with 66% of respondents stating they have more conviction in their low-carbon transition strategies than they did one year ago. This rising confidence is set to drive further capital allocation towards sustainability-driven investments.

Technology to Optimize Asset Allocation

In response to growing complexity in asset management, insurers are investing heavily in technology to support their strategies. Integrated asset allocation (63%) and asset liability management (61%) were cited as top priorities, with 53% of respondents also seeking technology solutions to enhance private asset modeling.

About the BlackRock Global Insurance Survey

Conducted between July and September 2024, the BlackRock Global Insurance Survey gathered insights from 410 senior insurance executives across 32 markets, representing nearly $27 trillion USD in assets under management. The comprehensive report tracks trends and strategic priorities within the insurance sector, offering detailed insights into regional and global investment behavior.

To read the full report, visit BlackRock’s 2024 Global Insurance Report.