SINGAPORE - Asia Pacific insurers are looking to invest more in private market assets in a bid to diversify risks, a new study has found.
The BlackRock-commissioned study released on Monday found that 45 per cent of insurers plan to allocate more than 15 per cent of their portfolio to private asset classes over the next three years, compared with 25 per cent that have already done so.
Property and infrastructure are the most popular asset classes.
Mr David Lomas, global head of the insurance asset management unit, said:"Growing pressure on the profitability of insurers under a far more complex operating environment has made boosting investment returns a top priority for the industry."
This is why insurers are moving towards "higher-yielding opportunities, especially private asset classes".
The study involved insurers with more than US$6.2 trillion of assets worldwide.
The search for higher yield also sees insurers increasing their risk exposure, with 34 per cent saying that they "intend to increase their risk exposure over the next three years".
The study also found that among those who plan to take on more risks, 73 per cent plan to replacing or enhancing investment income, and 60 per cent are hoping to increase diversification benefits.
Mr Lomas noted that insurers are increasingly open to investing in illiquid private market assets.