Insurers are not letting weak economic growth and historically low interest rates dampen their appetite for riskier investments, although cash remains a key part of the mix.
The findings from a report out yesterday show that only 8 per cent of 315 senior insurers around the world plan to reduce their exposure to investment risk, while 47 per cent expect to increase it.
The report commissioned by asset-management giant BlackRock also found that 46 per cent of insurers plan to maintain the status quo over the next 12 to 24 months.
However, the report said: "This result signals a slightly greater level of caution than in 2015, when 57 per cent of insurers globally planned to increase investment risk, against 38 per cent who expected to maintain it." It also found that while there is a willingness to assume greater investment risk, there is still a large number of insurers that expect to increase their allocation to cash and government bonds.
Those planning to increase their cash holdings in the next few months rose to 50 per cent from 36 per cent last year. Insurers which still expect to increase allocations to government bonds made up 47 per cent of respondents.
"This points to selective risk-taking across asset classes," said the report, adding there are "strong intentions to increase allocations to select private markets assets".
As such, 53 per cent of insurers plan to increase their exposure to direct commercial mortgage lending compared with 38 per cent last year.
The report also noted that 48 per cent planned to increase exposure to commercial real estate equity compared with 30 per cent last year, while 49 per cent are planning to increase allocations in private equity, up from 27 per cent last year.
Mr David Lomas, global head of BlackRock's insurance asset management business, said: "The uncertain macroeconomic environment is creating a number of tensions and apparent contradictions in fixed-income allocation.
"Insurers are stockpiling cash reluctantly, in order to move opportunistically when periods of market volatility allow."