Insurers still optimistic for 2025, but more are concerned — Conning survey

Most U.S. insurers expect to increase their investment risk tolerance in 2025, although optimism is tempered by concerns over geopolitical events and market volatility, according to a survey of U.S. life and property and casualty insurers released Feb. 11 by Conning, a global insurance asset management firm.

Specifically, 59% of insurers responding to the survey said they expect an increase in investment risk tolerance in 2025, compared with 62% that had expected an increase in tolerance for 2024.

“A greater level of uncertainty has likely led to greater restraint in insurers’ investment planning,” said Matt Reilly, managing director and head of insurance solutions at Conning and author of the survey report, in a news release Feb. 11. “However, insurers still expect to increase investment risk, expanding beyond their more traditional fixed income portfolio holdings to include greater exposure to private assets, in order to achieve yield and diversification.”

Twenty-two percent of survey respondents said they plan to decrease their investment risk tolerance in 2025, up from 14% that said they would do so in 2024, and 19% said it would stay the same, down from 22% in 2024.

When asked what changes they expect in their asset allocation in 2025, respondents’ desire to increase allocations to specific asset classes was more muted when compared with 2024. While 45% of respondents said they plan to increase their allocation to private equity, one of the highest percentages among all asset classes, that fell well below the 61% that planned to do so in 2024.

Another high response was for investment-grade public fixed income. Forty-four percent of respondents plan to increase their allocations in 2025, well below the 63% that responded they planned to do so in 2024.

Still, a significant majority of respondents — 77% — remain optimistic about the investment environment, slightly below the 80% that expressed optimism in last year’s survey.

“Insurers are looking to make their (current) portfolios work harder,” Reilly said in a Feb. 6 interview. “They’re still generally optimistic about the overall investment landscape. They’re continuing to look at private asset classes and sectors to expand their overall returns from their portfolio, but I think overall conviction seems to be a little bit muted.”

The survey was conducted in late November and compiled responses from 310 U.S. insurance industry professionals in both investment and operational roles, including both public and private companies.

As of Dec. 31, Conning had just under $170 billion in assets under management.