The 2025 Global Insurance Survey conducted by Goldman Sachs Asset Management (GSAM) has unveiled evolving macroeconomic concerns and investment strategies among insurance executives. This comprehensive survey, now in its 14th year, included input from 405 chief investment officers (CIOs) and chief financial officers (CFOs) managing over $14 trillion in assets. The survey reflects the changing priorities of insurers as they navigate through economic uncertainties.
Inflation and Recession Concerns
Inflation continues to be a paramount concern for insurance executives, with 52% of respondents citing it as their foremost macroeconomic risk. This marks a notable increase from the previous year, where only 42% viewed inflation as the primary threat. The rising concern around inflation underscores anxieties about decreasing purchasing power and the potential for increased claims costs, which could disrupt financial planning and stability within the insurance sector.
Accompanying inflation, the fear of a recession remains significant. Despite a slight decrease from the previous figures, 48% of the surveyed executives still regard the risk of an economic slowdown as a major challenge. These dual threats of inflation and potential recession create a complex scenario for insurance firms, necessitating strategic adjustments and prudent risk management to secure financial health and operational continuity.
Emergence of Trade Policy Concerns
For the first time, tariffs and trade disputes have emerged as prominent risks, highlighted by 32% of insurance executives. This newly recognized concern is largely attributed to the trade policies of recent administrations, which have revived discussions on the impact of international tariffs. The re-emergence of these trade policy risks reflects broader geopolitical uncertainties that necessitate insurers to reassess their global strategies and prepare for potential economic disruptions stemming from trade disagreements.
This newfound focus on trade policies represents a shift in the geopolitical landscape, urging insurers to rethink their strategic responses to international trade tensions. The global nature of the insurance business makes it particularly sensitive to tariffs and trade wars, which could impact profitability, cross-border operations, and financial stability. As such, these trade policy concerns are now integral to the industry’s risk assessment frameworks.
Shifting Investment Strategies
To navigate the current economic volatility, insurers are increasingly reallocating their assets toward private investments. Approximately 62% of the surveyed executives revealed plans to enhance their allocation to private assets within the upcoming year. This strategic pivot underscores insurers’ efforts to seek higher returns and mitigate risks through diversified portfolios in the face of uncertain macroeconomic conditions.
Private credit particularly stands out within these private investment vehicles, with 61% of respondents anticipating attractive returns from this asset class. The allure of private credit lies in its potential to provide higher yields compared to traditional fixed-income securities while offering a degree of insulation from public market volatility. This shift signals a deliberate move by insurers to stabilize their portfolios and harness new opportunities for financial growth and resilience.
Technology Adoption in the Insurance Sector
The transformation of the insurance industry is being significantly propelled by technological advancements, particularly the adoption of artificial intelligence (AI). Currently, nearly 48% of insurers have already integrated AI into their operations, with an additional 42% considering its implementation within the next year. AI’s primary benefit is its ability to reduce operational costs, which is seen as crucial for enhancing efficiency and maintaining competitive advantage.
The incorporation of AI extends beyond cost reduction, also encompassing improvements in customer service, underwriting, and claims processing. By leveraging AI, insurers gain the ability to analyze large datasets more accurately, predict risks with greater precision, and streamline decision-making processes. This technological evolution positions the insurance sector to better navigate economic uncertainties and respond dynamically to emerging challenges and opportunities.
Market Volatility and Geopolitical Risks
Despite a slight decline from the previous year, market volatility remains a prevalent concern among insurance executives, with 47% of respondents identifying it as a significant risk. This persistent anxiety highlights the need for robust strategic responses to safeguard portfolios against price fluctuations and unforeseen market shifts.
In tandem with market volatility, geopolitical tensions continue to loom large, with 43% of respondents citing them as a notable risk. The complex interplay of political events and their potential economic ramifications necessitates vigilant monitoring and adaptive risk management strategies. Insurance firms are emphasizing resilience and adaptability in their approaches to mitigating the impacts of these external uncertainties, reinforcing their commitment to maintaining financial stability.
Increased Allocation to Private Investments
The ongoing trend towards private investments within the insurance sector is driven by the quest for higher returns and improved portfolio diversification. This inclination towards private assets is particularly evident in the growing interest in private credit and private equity investments. Insurers are increasingly engaging in these asset classes as they offer compelling risk-adjusted returns, attractive yield prospects, and insulation from public market turbulence.
The migration towards private investments reflects a proactive strategy by insurers to enhance financial performance and stability. This approach is further supported by the potential of private credit to deliver substantial returns, as evidenced by 61% of respondents ranking it among the top five high-return asset classes. By broadening their investment horizons, insurers aim to secure resilient and diversified portfolios capable of withstanding economic pressures.
Focus on Technological Transformation
The insurance sector’s rapid embrace of AI and other technological innovations underscores its focus on leveraging technology to boost operational efficiency. The prevalent adoption of AI is coupled with heightened merger and acquisition (M&A) activity aimed at achieving economies of scale and operational synergies. These developments signal a forward-thinking movement within the industry, positioning insurers to effectively address evolving challenges and capitalize on new opportunities.
Technological transformation is not merely a trend but a strategic imperative for insurers looking to enhance their competitiveness. By adopting AI and advancing digital capabilities, the sector is poised to redefine its operational models, streamline processes, and offer superior services to clients. This technological evolution serves as a cornerstone for the industry’s future growth and adaptability in an ever-changing economic landscape.
Persistent Macroeconomic Uncertainty
The enduring concerns surrounding inflation and recession continue to dominate the macroeconomic landscape for insurance executives. These persistent uncertainties necessitate strategic adjustments in asset allocation and risk management practices to safeguard against adverse impacts. Insurance firms are increasingly adopting guardrails such as diversified portfolios and stringent risk assessment protocols to shield their investments from economic volatility.
The proactive measures taken by insurers reflect a cautious yet adaptive approach to navigating the complexities of the current economic environment. By continuously monitoring macroeconomic indicators and adjusting their strategies accordingly, insurance executives aim to maintain financial health and operational resilience amidst fluctuating economic conditions. This vigilant approach is vital for ensuring the sector’s long-term stability and growth.
Duration and Credit Risk Adjustments
To secure higher yields on fixed-income securities, insurers are making strategic adjustments to their portfolios. Approximately 35% of respondents plan to increase the duration of their investment portfolios, reflecting an ongoing demand for enhanced returns through longer-term assets. This strategic move indicates insurers’ confidence in the potential of fixed-income securities to deliver stable returns amidst market uncertainties.
In addition to increasing duration, insurers are also keen on adjusting their credit risk exposure. About 32% of respondents intend to elevate credit risk within their portfolios, highlighting a calculated effort to achieve better returns in a challenging economic climate. This deliberate strategy involves balancing the pursuit of higher yields with prudent risk management to mitigate potential downsides and ensure sustainable financial performance.
Strategic Shifts in Private Credit and Alternatives
The shift towards private credit and alternative investments represents insurers’ concerted efforts to pursue higher returns and better diversification. Private credit, in particular, is anticipated to offer substantial returns, as evidenced by 61% of respondents ranking it among the top five high-return asset classes for the next 12 months. This preference underscores the strategic emphasis on alternative investments to achieve attractive risk-adjusted returns.
Insurers’ growing interest in alternative asset classes, including private equity, aligns with their goal of diversifying portfolios and capitalizing on high-growth opportunities. The use of open-ended private market vehicles further facilitates this strategic shift, enabling insurers to access a broader range of investment opportunities and enhance their financial resilience. This approach is indicative of the dynamic adaptation strategies being employed within the insurance sector.
Technological Innovation and Efficiency
The rapid adoption of AI within the insurance sector underscores the industry’s commitment to technological innovation. With 48% of insurers already implementing AI and another 42% considering it, the focus on enhancing efficiency and reducing operational costs is clear. This tech-driven transformation is set to redefine operational models, streamline processes, and enable insurers to better navigate future challenges.
The integration of AI into various aspects of insurance operations, including underwriting, claims processing, and customer service, showcases the sector’s forward-thinking mentality. By harnessing the power of AI, insurers are better equipped to analyze data, predict risks, and make informed decisions. This technological evolution is poised to drive significant improvements in operational efficiency and service delivery, positioning the industry for sustained growth and competitiveness.
Addressing Market Volatility and Geopolitical Tensions
Concerns about market volatility and geopolitical risks remain prominent among insurance executives, despite a slight decrease in intensity. These risks demand robust strategic responses and thorough risk management frameworks to mitigate their impact. Insurance firms are prioritizing resilience and adaptability in their investment strategies to address these external uncertainties effectively.
Strategic risk management practices are essential for safeguarding portfolios against market fluctuations and geopolitical upheavals. By adopting comprehensive risk assessment protocols and diversifying their investments, insurers can strengthen their financial stability and navigate the complexities of the current economic landscape. This proactive approach underscores the industry’s commitment to maintaining resilience and achieving sustainable growth in the face of ongoing challenges.
Geographic Distribution and Sector Breakdown
The 2025 Global Insurance Survey’s geographic distribution highlights diverse perspectives from different regions. The survey includes responses from 38% of participants in the Americas, 43% from Europe, the Middle East, and Africa (EMEA), and 20% from the Asia-Pacific region. This wide-ranging input provides a comprehensive view of the global insurance landscape and the varying challenges faced by insurers in different locations.
The sector breakdown reveals that life insurers represent the largest share of respondents at 43%, followed by property and casualty insurers at 29%. Multiline carriers account for 16%, with reinsurers and health insurers each representing 5%, and captives making up 1% of respondents. This varied representation ensures a holistic understanding of the industry’s dynamics and the evolving priorities across different insurance segments.
Conclusion and Forward Perspective
The 2025 Global Insurance Survey, conducted by Goldman Sachs Asset Management (GSAM), reveals shifting macroeconomic concerns and investment strategies among insurance executives. This in-depth survey, now marking its 14th year, gathered insights from 405 chief investment officers (CIOs) and chief financial officers (CFOs). Together, these executives oversee more than $14 trillion in assets. The survey highlights the evolving priorities of insurers as they grapple with ongoing economic uncertainties.
The findings indicate that insurance executives are increasingly focused on adapting their investment strategies to navigate the unpredictable economic landscape. Issues such as inflation, interest rates, and market volatility are at the forefront of their concerns. Additionally, the survey indicates a growing emphasis on sustainable investing and environmental, social, and governance (ESG) criteria.
By understanding these evolving factors, insurance companies aim to better position themselves for future challenges and opportunities. This year’s survey underscores the importance of agility and foresight in investment management, especially as the global economic climate remains uncertain. Overall, the 2025 Global Insurance Survey provides valuable insights into the strategic thinking and priorities of insurance leaders, reflecting their ongoing efforts to balance risk and return in a complex environment.