Mercer and Oliver Wyman 2024 Global Insurance Investment Survey 

Discover how market volatility, elevated interest rates, and evolving regulatory requirements are driving insurers to reevaluate their investment strategies. 
Against a volatile market backdrop, many insurers are re-evaluating their fixed income strategy.
Our 2024 study canvassed the views and plans of more than 80 global insurers, to share in-depth insights and key learnings based on: their views on investment challenges and opportunities in the current environment; investment decision-making and plans for portfolios; approaches to sustainable investing, net-zero target setting and implementation; and the operational challenges ahead.

Key observations among Asia- based insurers

Market volatility is at the forefront of Asia-based insurers’ concerns over the months ahead, though the knock-on impact of capital losses or insufficient cashflow on the ability to modify or adjust portfolios, alongside broader operational challenges are also prominent concerns in the region. Against this backdrop, many insurers in Asia are reevaluating their fixed income strategies. 
What is top of mind for Asia-based insurers this year?
  • 88%

    regard market volatility as the primary investment challenge
  • 63%

    cite optimizing the core fixed income portfolio as a key investment opportunity over the year ahead .
  • 50%

    regard evolving regulatory requirements and adapting to regulatory changes as key operational challenges

Opportunities for insurers in Asia 

  • 50% of Asia-based insurers are looking to diversify credit exposure to include high yield and emerging market debt compared to 18% and 17% of US- and Europe based insurers respectively.
  • Across portfolios more broadly, 50% of Asia-based insurers view continued diversification away from traditional asset classes, including public equities and fixed income, as a priority in 2024.

  • Three-quarters (75%) of insurers currently invest in private markets or plan to do so in 2024; 38% of Asia-based insurers intend to increase their private markets allocations this year
  • In 2023, 63% of Asia-based insurers increased allocations to private equity (PE), while 38% dialed up allocations to investment grade (IG) private debt. 
  • This year, the push into private markets looks set to continue, with 20% reporting plans to increase PE exposure and 32% intending to increase IG private debt allocations.

  • Nearly two-thirds (63%) cite accounting and regulatory intrusion as a major challenge to portfolio implementation.
  • Other prominent operational challenges for insurers include timeliness (50%) of data on underlying holdings, investment accounting and statutory reporting (50%), and manager selection and oversight (50%).

  • Nearly two-thirds (63%) cite ESG policy formation and implementation as a key operational challenge in 2024.
  • Three-quarters of Asia-based insurers already incorporate sustainability considerations into investment decisions, with the remaining 25% planning to increase exposure to sustainable investments over the year ahead.
  • More than two thirds (67%) of Asia-based respondents cite a lack of sustainable investment options as a key concern.
  • Most Asia-based respondents are yet to set net-zero targets across their investment portfolios, lagging behind peers in Europe and the UK.

Upcoming regulatory changes in Asia…

With the Solvency Capital Requirement implementation likely to take place from 2025, what does this mean for insurers based in Asia— and how they can respond effectively and prioritize the right actions to take?

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