Insurers anticipate more favourable investment opportunities this year compared to the previous year, though many expect risk levels to rise, according to a new global study by Ortec Finance.
The research indicates optimism among insurers and investment managers regarding fixed income, equities, and private markets. Approximately 83% of respondents believe investment opportunities in fixed income will improve this year, with 46% expecting a substantial increase in attractiveness.
In private markets, 80% of those surveyed expect conditions to be more attractive, including 17% who predict a dramatic improvement. For equity markets, 74% foresee better opportunities, though only 3% anticipate a significant enhancement.
The study also highlights expectations for increased risk. Seventy-five per cent (75%) of respondents expect equity risk in insurance portfolios to rise over the next 12 months, with 16% predicting a dramatic increase. Meanwhile, 23% expect no change, and just 2% foresee a decrease in equity risk.
Credit risk is also a concern, with 45% of participants expecting a dramatic increase in their portfolios and another 45% anticipating a slight rise. None of the respondents expect credit risk to decline, while 10% believe it will remain unchanged.
Meanwhile, all of this is happening as the broader reinsurance sector is facing a shifting landscape. According to a recent Fitch Ratings report, global reinsurers are expected to see a decline in underwriting results heading into 2026, with profitability coming under pressure due to wildfire losses and softening markets.
Despite these challenges, the sector’s largest players achieved a record average return on equity of 21.1% in the first half of 2025. Catastrophe bond issuance reached record levels, providing insurers and reinsurers with additional risk transfer options and contributing to capacity growth.
Hamish Bailey (pictured above right), managing director UK and head of insurance & investment at Ortec Finance, commented, “It would seem that investment managers in the insurance industry are more optimistic about investment opportunities across both private and public markets this year compared to last year. Fixed income stands out as the most attractive area, but there is also confidence in private assets and the equity market, although optimism in the equity market is more subdued.”
Bailey added that the increase in attractive investment opportunities is accompanied by rising risk levels in equity and credit markets, underlining the importance of robust risk management.
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