Ortec Finance: Insurers ready to take on more risk as capital to invest rises
Insurers are ready to take on more risk in the year ahead with a rise in capital to invest expected, a new report from Ortec Finance says.
The report, based on a global study with insurers and insurance asset managers, found 83% believe risk profiles will increase in the year ahead, with 20% expecting a dramatic increase.
The study from Ortec Finance found more than three quarters (77%) of insurers and insurance asset managers say an increase in capital to invest in their organization is definite or likely in the year ahead. Only 2% think it will definitely not happen.
They are optimistic about investment opportunities with private markets, fixed income and equities seen as among the most attractive sectors. Around 80% believe investment opportunities will be more attractive in private markets this year compared with last year with private debt, private equity and real estate the key areas for investment.
The report shows spending on risk management by insurers will rise over the next two years - insurers and investment managers look set to invest more in stress testing, scenario modelling and asset liability management (ALM). Nearly four out of five (79%) plan to increase both spending and effort in these areas, with 24% planning dramatic increases.
Spending on risk management is part of wider investment by insurers who are increasingly using AI to guide and improve their investment strategy. All firms surveyed expected their investment in AI to rise, with nearly half (49%) of respondents saying their organization’s budget for AI applications will rise by 75% or more over the next 12 months.