Why insurers turn to private markets in 2025?

Over the next 12 months, 67% of insurers plan to use reinsurance sidecars.

Insurers are showing interest in private markets and new operating models as they adapt to a volatile market, according to BlackRock’s 14th annual Global Insurance Report.

Inflation remains the biggest concern for global insurers, with 63% ranking it as their top risk.

The report, which surveyed 463 senior investment professionals across 33 markets managing a combined $23t in assets, found that only 12% plan to increase their overall investment risk exposure in 2025. 

However, 30% expect to raise allocations to private markets, whilst 58% plan to maintain current levels. 

Private credit, infrastructure, and multi-alternative strategies were the most popular opportunities.

Public markets remain central to portfolios, with 73% of insurers keeping their allocations unchanged and 21% increasing them.

A major theme this year is the shift toward more flexible operating models. Around 85% of insurers are adopting hybrid asset management structures that blend in-house expertise with external partnerships. 

Technology is playing a growing role, with most respondents investing in AI-driven software for portfolio, risk, and analytics tools.

Capital management is another focus area. Over the next 12 months, 67% of insurers plan to use reinsurance sidecars, 54% expect to expand third-party capital usage, and 53% aim to strengthen captive capabilities.

Insurers are also maintaining their sustainability goals. 

Clean energy infrastructure remains the top investment theme for the second year in a row, cited by 55% of respondents, followed by core infrastructure (51%) and green bonds (38%).

Mark Erickson, Global Insurance strategist at BlackRock, said insurers are “navigating volatility with discipline” whilst seeking long-term opportunities in private markets.