Insurance asset managers intensify focus on stress testing, scenario modelling and ALM

Written by Adam Cadle

26/06/2025

Nearly four out of five (79%) insurance asset managers plan to increase both spending and effort in stress testing, scenario modelling and asset liability management (ALM) over the next two years, according to a survey by Ortec Finance.

Twenty-four per cent said they plan dramatic increases. Currently, most outsource their ALM studies, with just 9% conducting them entirely in-house. Around 23% outsource completely, while 68% outsource some elements.

Nearly half (45%) assess the risks of assets while 37% assess the risk of liabilities. Ten per cent assess the risks of both in isolation, and only 8% of respondents said they consider the combined risks on both sides of the balance sheet.

Hamish Bailey, managing director UK, and head of insurance & investment said: “Scenario modelling, stress testing and ALM seem to be an area of focus for insurers and investment managers with many planning to increase investment over the next two years. This survey reflects what we are seeing in our own client base with a combination of increased market volatility and continued investment in complex asset classes emphasizing the need for robust risk management approaches.”

Ortec Finance commissioned independent research company Pureprofile to interview 100 senior executives working in insurance asset management or in investment management firms supporting insurers in May 2025. Survey respondents are located in the UK, France, Germany, Switzerland, Hong Kong, Malaysia, Singapore and Norway. Collectively the organisations they work for manage around $10.48trn.

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