The pace at which insurers intend to increase their allocations to private markets has significantly decelerated over the past year, with a notable 18 percentage point drop in those planning such expansions. This trend emerges despite a persistent majority of these institutional investors still signalling their intention to boost their exposure to this asset class, according to the latest findings from BlackRock’s 2026 Global Insurance Survey. The research, which canvassed 463 insurers across 31 global markets representing over $24 trillion in investable assets, paints a picture of increased selectivity and strategic nuance within the insurance sector’s approach to alternative investments.
Shifting Sands in Private Markets Allocation
The survey reveals that approximately three-quarters of respondents now plan to increase their private markets exposure in the coming 12 months. This figure, while still indicating a majority appetite for growth, represents a considerable decline from the 94% who expressed similar intentions in 2025. The current sentiment is also a downturn from the 91% recorded in 2024 and 89% in 2023, underscoring a clear deceleration in the planned pace of increased allocations.
Despite this moderation in growth plans, private markets remain a firmly embedded component of insurers’ investment strategies. The BlackRock survey highlights that a substantial 92% of insurers currently allocate at least 5% of their investment portfolios to private markets. Furthermore, a significant segment, exceeding 40% of respondents, has already established private markets allocations that surpass 15% of their total portfolios. This indicates a foundational commitment to the asset class, even as the rate of new investment is recalibrating.
Private Debt Leads the Charge, Bespoke Solutions in Demand
Within the broader private markets landscape, private debt has emerged as the most favoured area for additional investment. Forty-one percent of insurers identified private debt as a key target for future allocations. This preference underscores the ongoing search for yield and stable income streams that private debt instruments can offer, particularly in environments characterized by evolving interest rate dynamics and a search for diversification beyond traditional fixed income.
Complementing this preference for private debt is a pronounced inclination towards customized investment structures. A significant 74% of insurers indicated plans to access private debt through separately managed accounts (SMAs) or bespoke investment mandates. This signals a move away from more standardized fund structures towards tailored solutions that can be precisely aligned with an insurer’s specific liability profiles, regulatory requirements, and risk appetites. The emphasis on customisation suggests a maturing understanding of how private markets can be strategically integrated to meet distinct insurance balance sheet objectives.
The Rise of the Hybrid Asset Management Model
The preference for customised investment solutions aligns with a broader trend observed in the survey: the increasing adoption of a hybrid asset management operating model. BlackRock’s research found that 84% of insurers now describe their asset management approach as hybrid, a model that strategically blends internal investment management capabilities with the expertise of external asset managers.
Looking ahead, nearly half (49%) of insurers anticipate an increase in their reliance on external asset management over the next year. This suggests a strategic decision to leverage specialist knowledge and capacity from third-party providers for specific asset classes or strategies, while maintaining in-house control over core investment functions and strategic asset allocation. This hybrid approach offers a flexible and efficient way to navigate the complexities of modern investment portfolios and to access specialized investment opportunities in areas like private markets.
Macroeconomic Headwinds Ease, Selectivity Takes Center Stage
The observed reduction in planned private markets allocation increases occurs against a backdrop of substantially improved macroeconomic expectations among insurers. The survey data reveals a notable decline in recessionary fears, with only 18% of respondents now identifying recession as a leading concern, a significant drop from 35% in 2025. This suggests a growing confidence in the stability of the global economic outlook.
Inflation, however, continues to be the most persistently cited macroeconomic risk, identified by 62% of insurers. Despite this, a majority (61%) now anticipate a "soft economic landing" over the next 12 months. This optimism regarding a gentle economic deceleration, rather than a sharp downturn, is not uniform across all regions. Expectations for a soft landing are highest in Europe, the Middle East, and Africa (75%), followed by North America (63%). Asia-Pacific and Latin America show more cautious sentiment, with 47% and 40% respectively anticipating a soft landing. These regional variations highlight the diverse economic landscapes and outlooks that insurers are navigating globally.
A Strategic Pause: Prioritizing Risk Management and Opportunity Scarcity
Despite the more optimistic macroeconomic outlook, a significant majority of insurers, 82%, plan to maintain their existing investment risk profile. This cautious stance is further illuminated by the fact that, among those maintaining their risk levels, 57% cited insufficient investment opportunities as the primary reason for not taking on additional risk. This proportion has increased by a substantial 22 percentage points since 2025, indicating a growing perception of scarcity in compelling investment opportunities that warrant an elevated risk-taking approach.
For half of this group, the priority has shifted towards achieving greater diversification within their existing risk budgets. This implies a focus on optimizing portfolio construction and asset allocation to enhance resilience and capture returns more efficiently, rather than seeking out higher-risk, higher-return propositions. This strategic recalibration suggests a move towards a more sophisticated and measured approach to investment management, where the quality and suitability of opportunities are paramount.
Expert Commentary: Strategic Commitment Versus Indiscriminate Buying
Charles Hatami, Global Head of the Financial and Strategic Investors Group and Co-Head of the Global Partners Office at BlackRock, provided insights into these evolving trends. He emphasized that while private markets are an established and strategically important part of insurers’ investment frameworks, this commitment does not equate to an unfettered pursuit of assets.
"Private markets are an established part of insurers’ investment strategies, but strategic commitment does not mean indiscriminate buying," Hatami stated. He further elaborated on the nuanced decision-making process, noting, "The question is not simply how much to allocate, but which assets and structures best support each insurer’s income, liquidity and capital objectives. That places a premium on investment selection and solutions designed for the insurance balance sheet."
Hatami’s remarks underscore a critical shift: the focus is moving from a broad expansion into private markets to a more discerning and purpose-driven approach. Insurers are increasingly evaluating private market investments based on their ability to directly address specific financial objectives, such as generating consistent income, ensuring adequate liquidity, and meeting stringent capital requirements. This heightened level of strategic consideration suggests that the future of private markets allocation for insurers will be driven by a deeper understanding of individual institutional needs and the precise fit of investment solutions.
Broader Implications for the Insurance Industry and Asset Management
The findings of the BlackRock survey carry significant implications for both the insurance industry and the broader asset management landscape. For insurers, the trend towards increased selectivity and the preference for bespoke solutions signal a maturing of their approach to alternative investments. This could lead to more resilient portfolios, better alignment with regulatory demands, and improved financial outcomes. The emphasis on a hybrid asset management model also suggests a continued evolution in how insurers manage their investment operations, balancing internal expertise with external partnerships.
For asset managers, particularly those operating in the private markets space, the survey highlights the growing importance of offering tailored solutions and demonstrating a clear value proposition that goes beyond generic product offerings. The demand for SMAs and bespoke mandates indicates a need for greater flexibility, customization, and a deep understanding of client-specific requirements. Asset managers will need to invest in capabilities that allow them to deliver highly customized solutions and to forge deeper, more strategic partnerships with institutional clients like insurers.
The data also points to a potential moderation in the rapid inflow of capital into certain private markets segments, as investors become more discerning. While overall allocations are still expected to grow, the pace of that growth may slow, and the capital will likely be directed towards more strategically aligned and rigorously selected opportunities. This could lead to a more sustainable and less speculative growth trajectory for the private markets industry, fostering greater efficiency and potentially better risk-adjusted returns for investors.
The ongoing evolution of insurer investment strategies, influenced by macroeconomic conditions, regulatory landscapes, and a deeper understanding of asset class characteristics, will continue to shape the investment landscape for years to come. The current trend towards selectivity in private markets underscores a more sophisticated and strategic phase in the integration of these complex asset classes into the core of institutional portfolios.
