Insurers boost private asset allocations as capital increases

Written by Adam Cadle

17/06/2025

More than three quarters of insurers and insurance asset managers have said an increase in capital to invest in their organisation is definite or likely in the year ahead, according to Ortec Finance.

Just 2% said they think it will definitely not happen.

Two thirds of those surveyed believe private debt will see the biggest percentage increase in allocation from this capital, followed by private equity and real estate.

However, the insurance investment managers have concerns that the level of transparency and reporting from private fund managers is often not robust enough. More than a fifth (21%) of those polled strongly agree that these issues prevent insurers from investing in some private funds because they cannot show they are compliant with the regulations they face. Seventy-nine per cent said they slightly agree.

Inflation protection is regarded as the most important reason to invest in private assets, chosen by 35% ahead of 30% who selected diversification, while 22% chose cashflow matching and 13% returns and illiquidity premiums.

Around 62% expect distributions for private equity – the means by which private equity funds return capital to investors – to be higher in the future Around 35% expect them to remain at the same level as in recent years.

Hamish Bailey, managing director UK, and head of insurance & investment said: “The study highlights continued momentum behind private asset allocation, with many insurers expecting to see an increase in capital to invest in the year ahead.”

“The motivation is driven by the search for inflation protection in real world assets, diversification benefits, and a long-term focus.

“However, transparency and reporting remain key barriers. Without robust data and disclosures from private fund managers, many insurers face regulatory hurdles limiting their ability to fully capitalise on these opportunities.”

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