European insurers’ outsourcing of investment management continues to grow

Written by Adam Cadle

13/02/2025

European insurers’ outsourcing of investment management to external (non-captive) managers has continued to grow steadily from 2019 to 2024, with AuM increasing from €1.2trn in 2019 to almost €1.4trn in 2024, according to a new report by Novantigo.

The report, 2025 Outlook: Insurance Asset Management in Europe – Outsourcing Trends and Opportunities for Asset Managers, said projections suggest this upward trend will continue, although outsourced investments are expected to grow at a slower pace over the next five years. The CAGR for the past five years was 1.7%, while for the next five years, through 2028, the estimated CAGR is 0.8%, with AuM projected to reach €1.6trn by 2028.

The data also revealed that a larger proportion of French insurers (net 65%) intend to increase the share of externally managed assets over the next three to five years, compared to their counterparts in the UK (net 38%) and Germany (net 31%). Further analysis based on insurer type and size showed that non-life insurers and those with AuM below €5bn are particularly inclined to expand their use of external asset managers during this period.

The report also looked at asset allocation and found that nearly a third (31%) of the outsourced strategies were private investments. The preference for private investment was strongest in the UK and Germany with structured credit, private equity and infrastructure the most popular alternative asset classes.

The survey found that the majority of insurers intend to increase their private asset allocations in the next 12 months, and found that there was a difference in the asset allocations of insurers based on their size.

“Larger insurers tend to be more aggressive in diversifying their exposure across different private asset classes and are seeking niche investment opportunities, while smaller insurers, typically with limited allocations to private assets, are looking to expand their exposure across various private asset strategies,” said Andre Schnurrenberger, co-founder and managing partner at Novantigo.

The report studied 467 outsourced mandates and funds from a survey of 130 European insurers.

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