76% of Insurers See Investment Opportunities Improving

U.S. insurers remain optimistic about investment conditions for 2026, even as they anticipate a more challenging macroeconomic environment marked by higher inflation, liquidity risk and lower Fed interest rates, according to the new annual Conning Insurance Investment Risk survey. Despite these headwinds, insurers detect opportunities in private markets, high-quality fixed income and infrastructure which will allow them to increase the investment risk necessary for growth in the year ahead, 201 U.S. P&C and Life insurance investment decision-makers noted. The survey was completed in December of 2025.

• 57% of insurers expect inflation to increase moderately over the next 12 months
• 52% of insurers expect the yield on the 10-year Treasury to end the year below 3.5%
• 47% of insurers say Federal Open Market Committee actions will be significantly important to their investment strategy in 2026

“An increasingly complex market requires insurers to balance heightened risk awareness with the need to adapt to shifting macroeconomic expectations,” said Matt Reilly, managing director, head of Conning’s Insurance Solutions group, and author of the survey report. “Choosing the right partners, tools, and investment strategies is critical in this environment,” he added.

Challenges Aside, Opportunities for Investment Improve

Overall, respondents are increasingly optimistic about the investment environment in 2026, as sentiment rebounded from a slight dip in the prior year’s survey.

Most respondents plan to increase their investment risk this year, with 76% saying investment opportunities for insurers are improving. The reasons for this increased risk appetite include higher yields for high-quality fixed income securities, attractive investment opportunities across a variety of private markets, and growing sectors, including both digital and traditional infrastructure.

Although most insurers remain optimistic, there are critical challenges. Inflation returns as the second leading concern for insurers after ranking seventh in last year’s survey. Liquidity risk is also a significantly higher priority after being ranked well below other considerations last year, potentially reflecting the growing level of private assets in portfolios. Otherwise, market and asset price volatility was cited as the top portfolio risk and the risk of recession ranked third.

The Increasing Role of Private Assets

In spite of concerns about liquidity, but recognizing the need for diversification and growth, insurers’ appetite for private assets will continue to expand this year. Further, 79% of respondents expect to have between 10% and 25% allocated to private assets in two years, up from an estimated 63% last year. A majority 87% of respondents list their current private asset allocations between 5% and 20% of portfolios, up from 71% who said the same last year.

Asset-based finance is the most commonly cited area of growth with 60% indicating increased exposure this year. Also worth noting is the continued trend toward public and private portfolio allocation decisions. Roughly half of respondents plan to increase allocations to private equity, private placements, real estate and infrastructure, while public market plans are in short-term securities and investment-grade public securities.

Rate Expectations Impact on Portfolio Positioning

A focus on Federal Reserve policy returns as a possible headwind with the expectation that interest rates will be lowered in 2026, after several years of elevated yields across the curve. This is expected to increase portfolio duration from 64% last year to 76% this year.

Exposure to floating-rate assets is expected to increase to 57% from 53% last year, suggesting an interest rate barbell approach will continue to prevail.

Portfolio turnover jumped from 50% in the previous survey to 73% this year with most asset managers citing eagerness to pursue tactical market opportunities or, to a lesser degree, aligning portfolios with longer-term investment goals or simply generating cash to support needs.

To learn more about this year’s survey findings, reference the 2026 results summary and interactive graphics on Conning’s website: https://go.conning.com/investment-risk-survey-viewpoint-website-0226

About Conning

Conning is a leading investment management firm and with affiliates has more than $190 billion in global assets under management as of December 31, 2025.* With a long history of serving insurance companies and other institutional investors, Conning supports clients with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America. Conning is part of the Generali Investments platform, which has approximately $732 billion in assets under management.**

* As of December 31, 2025, includes Conning, Inc., Conning Asset Management Limited, Conning Asia Pacific Limited, Conning Investment Products, Inc., Goodwin Capital Advisers, Inc. (collectively, “Conning”), and Conning subsidiaries Global Evolution Asset Management A/S, MGG Investment Group, Octagon Credit Investors, LLC, and Pearlmark Real Estate, LLC and its subsidiaries (collectively “Affiliates” and together with Conning, “Conning & Affiliates”).

** Generali Investments Holding S.p.A., data as at end of Q2 2025 net of double counting. Please note that the AUM of MGG Investment Group is not included in the platform’s total AUM, as the acquisition was completed on October 1, 2025.. Generali Investments is part of the Generali Group. Generali Asset Management S.p.A. Società di gestione del risparmio, Generali Real Estate S.p.A. Società di gestione del risparmio, Infranity SAS, Sosteneo S.p.A. Società di gestione del risparmio, Sycomore Asset Management, Aperture Investors LLC (including Aperture Investors UK Ltd), Lumyna Investments Limited, Plenisfer Investments S.p.A. Società di gestione del risparmio, Conning, Inc., Conning Asset Management Limited, Conning Asia Pacific Limited, Conning Investment Products, Inc., Goodwin Capital Advisers, Inc. (collectively, “Conning”) and among its subsidiaries (Global Evolution Asset Management A/S - including Global Evolution USA, LLC and Global Evolution Fund Management Singapore Pte. Ltd - Octagon Credit Investors, LLC, Pearlmark Real Estate, LLC and MGG Investment Group), Generali Investments CEE are part of Generali Investments. Please note that the countries refers to the countries where the different funds of the asset management companies part of Generali Investments are registered for distribution. Please note that not all funds are registered in all the countries and not all the asset management companies are licensed to operate in such countries. Generali Investments Holding S.p.A. is the holding company holding, directly or indirectly, a majority of the shares in the asset management companies listed above.

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