U.S. insurance companies have an optimistic outlook and plan to increase their allocations to alternative investments and higher-yielding fixed-income securities, according to a survey from insurance asset manager Conning Inc.
Still, these insurers are more cautious than in recent years. According to the survey, conducted in December 2025, 57% of surveyed insurers said they plan to increase their investment risk tolerance this year, down from 59% and 62% in Conning’s 2024 and 2023 surveys, respectively.
“We continue to see most carriers in the survey looking to increase their investment portfolio risk,” says Matt Reilly, managing director and head of insurance solutions at Conning. “There was a slight tick up—and has been over the past couple of years—of companies looking to dial back investment risk, but overall, the majority are looking to take on a little bit more risk as they look forward over the next year.”
The survey found that 79% of insurers have an optimistic outlook for the investment climate in the year ahead, with 67% of respondents saying that investment opportunities for insurers are improving.
The survey identified three themes for this optimism: higher yields for high-quality fixed-income instruments; attractive investment opportunities in the private markets; and growing investment opportunities in traditional and digital infrastructure.
According to the survey, 83% of insurers had at least 10% of their portfolios invested in private assets, up from 71% in 2024.
“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,” says Reilly. “A lot of them are looking to increase exposure to areas that haven’t been in front of mind.”
One of these sectors is asset-based finance, which, according to the survey, is the asset class to which insurers most expect to increase their exposures: Approximately 60% of insurers said they plan to increase their allocations to ABF this year.
More than half of insurers said they expect to increase their allocations to private equity; cash and short-term instruments; investment-grade public fixed income; and private placements.
Asset classes to which insurers plan to decrease their allocations the most are infrastructure debt and equity, at just under 40% of respondents, and public equity, at more than 30% of respondents.
The survey noted that insurers remain risk-aware when evaluating their allocations to private markets, with the capital efficiency of their private asset buildouts a top concern.
With insurers expecting long-term interest rates to fall this year, the firms are planning to increase portfolio duration: Approximately 76% plan to increase their duration, while 13% say their duration will remain the same.
“You’ve seen higher levels of net investment income as carriers have been looking at their investment strategies, [and] you’ve seen increased book yields for companies’ portfolios, which has helped to drive profitability increases for both life and annuity and property and causality carriers,” Reilly says.
Insurers “expect to see longer-term rates fall … and that translates into looking to both increased duration in their portfolios, [and] we continue to see an increased interest in floating-rate securities,” Reilly continues. “So [they are], overall, looking to take on a little bit more interest-rate risk, but doing so in a barbell fashion.”
