Key Takeaways
- • 57% of U.S. insurers plan to increase investment risk tolerance in 2026, down modestly from 59% and 62% in 2024 and 2023 respectively, signaling sustained but more cautious appetite for higher-yielding assets.
- • 83% of insurers now hold at least 10% of portfolios in private assets, up from 71% in 2024, representing a 12-percentage-point year-over-year increase in alternative investment penetration.
- • 79% of surveyed insurers maintain an optimistic outlook on the 2026 investment climate, with 67% citing improving investment opportunities, driven by three primary factors: higher yields on quality fixed-income instruments, attractive private market opportunities, and infrastructure investment growth.
- • Private assets have become a strategic priority for insurance carriers, with survey respondents signaling intent to increase exposure to traditionally overlooked alternative asset categories beyond their current holdings.
- • Conning Inc.'s December 2025 survey reveals insurance industry's shift toward alternatives and higher-yielding fixed-income securities as a core portfolio strategy, despite slightly reduced risk appetite compared to prior years.
Summary
U.S. insurance companies are positioning for increased allocations to alternative investments and higher-yielding fixed-income securities in 2026, according to a December 2025 survey conducted by insurance asset manager Conning Inc. While insurers maintain an overall optimistic investment outlook, their appetite for additional risk has moderated slightly compared to recent years.
The survey reveals that 57% of respondents plan to increase their investment risk tolerance this year—a decline from 59% in 2024 and 62% in 2023. Despite this marginal pullback, Matt Reilly, managing director and head of insurance solutions at Conning, notes that the majority of carriers continue seeking to expand portfolio risk. "We continue to see most carriers in the survey looking to increase their investment portfolio risk," Reilly stated. "Overall, the majority are looking to take on a little bit more risk as they look forward over the next year."
Broader sentiment remains constructive, with 79% of insurers expressing optimism about the investment climate ahead. Significantly, 67% of respondents believe investment opportunities for insurers are improving. The survey identified three principal drivers of this confidence: elevated yields available on high-quality fixed-income instruments, attractive opportunities emerging in private markets, and expanding investment possibilities in both traditional and digital infrastructure assets.
Private assets have emerged as a critical strategic focus. The survey found that 83% of insurers maintained at least 10% portfolio allocation to private assets, a substantial increase from 71% in 2024. Reilly emphasized that private asset demand remains robust: "Private assets have been a really important focus for carriers, and we continue to expect the demand and the interest in a variety of different private asset categories to remain robust. A lot of them are looking to increase exposure to areas that haven't been in front of mind."
This shift reflects insurers' broader recalibration of portfolio construction in response to the current interest rate and valuation environment, positioning alternative investments as a key component of yield enhancement strategies while maintaining measured prudence relative to historical risk appetite.
The survey reveals that 57% of respondents plan to increase their investment risk tolerance this year—a decline from 59% in 2024 and 62% in 2023. Despite this marginal pullback, Matt Reilly, managing director and head of insurance solutions at Conning, notes that the majority of carriers continue seeking to expand portfolio risk. "We continue to see most carriers in the survey looking to increase their investment portfolio risk," Reilly stated. "Overall, the majority are looking to take on a little bit more risk as they look forward over the next year."
Broader sentiment remains constructive, with 79% of insurers expressing optimism about the investment climate ahead. Significantly, 67% of respondents believe investment opportunities for insurers are improving. The survey identified three principal drivers of this confidence: elevated yields available on high-quality fixed-income instruments, attractive opportunities emerging in private markets, and expanding investment possibilities in both traditional and digital infrastructure assets.
Private assets have emerged as a critical strategic focus. The survey found that 83% of insurers maintained at least 10% portfolio allocation to private assets, a substantial increase from 71% in 2024. Reilly emphasized that private asset demand remains robust: "Private assets have been a really important focus for carriers, and we continue to expect the demand and the interest in a variety of different private asset categories to remain robust. A lot of them are looking to increase exposure to areas that haven't been in front of mind."
This shift reflects insurers' broader recalibration of portfolio construction in response to the current interest rate and valuation environment, positioning alternative investments as a key component of yield enhancement strategies while maintaining measured prudence relative to historical risk appetite.
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