Insurers expect to increase their risk exposure in the year ahead as capital available for investment grows, according to new research from Ortec Finance. The global study of insurers and insurance asset managers found that 83% anticipate higher risk profiles over the next 12 months, with one in five predicting a significant increase. At the same time, 77% said an expansion of capital to invest in their organisations is definite or likely, while only 2% saw no prospect of growth. The trend is significant for insurance brokers, as insurers’ willingness to take on greater risk and invest more capital could lead to new product offerings, more competitive pricing and expanded capacity in the market.
Private markets are seen as a key area of opportunity. Nearly 80% of respondents expect more attractive investment conditions in private markets compared with last year, particularly in private debt, private equity and real estate. Fixed income and equities are also viewed as strong prospects.
The findings suggested a shift toward greater confidence among insurers, even as concerns about recession and liquidity remain. Ortec Finance also noted that in this environment, advanced tools for scenario analysis, balance sheet simulation and portfolio optimisation will be critical for firms aiming to balance growth with solvency requirements.
The report also highlighted a parallel rise in investment in risk management. Nearly four in five respondents plan to increase both spending and effort in areas such as stress testing, scenario modelling and asset-liability management over the next two years, with nearly a quarter planning dramatic increases.
Technology is expected to play a growing role in these strategies. All firms surveyed said they plan to expand their use of artificial intelligence, with almost half anticipating budget increases of 75% or more for AI applications in the next year. AI is being applied across investment analysis, portfolio management, and risk monitoring, enabling insurers to respond faster to market volatility.
Industry analysts pointed out that this renewed appetite for higher-risk assets will likely increase the importance of capital efficiency. Under regimes such as Solvency II, insurers will need to demonstrate that their balance sheets can withstand market shocks while maintaining adequate buffers. For some, reinsurance may play a larger role in freeing up capital for investment, particularly for life insurers with long-term guarantees.
At the same time, the competitive landscape could shift as firms with more advanced modelling capabilities and AI integration gain an edge in pricing, portfolio construction and risk transfer. Mid-sized and smaller insurers may find themselves under pressure to keep pace with the scale and sophistication of larger peers investing heavily in technology.
The results underscored how insurers are navigating a balance between seizing new investment opportunities and reinforcing risk controls. With capital inflows providing room for growth, the industry is turning to advanced modelling techniques, AI tools, and reinsurance strategies to manage more complex exposures while maintaining resilience.
