Insurers optimistic about their investments in 2026

Insurers remain optimistic about their investments going into 2026, despite heightened market uncertainty.

This marks the fifth year in which Conning surveyed U.S. insurers about their investment focus. Two Conning analysts unpacked the 2026 findings in a recent webinar.

“Markets performed pretty well in 2025 despite Liberation Day and a lengthy government shutdown,” said Matt Reilly, head of insurance solutions at Conning. “Investment performance for insurers has been strong over the last few years.”

Insurer optimism remained high between 2024 and 2026, Conning found, with 79% of insurers surveyed saying they had a positive view of the future in 2026, down only one percentage point from 2024.

Market volatility is insurers’ biggest portfolio concern

But some risks persist, Reilly said.

Market volatility, inflation and recession risk lead the list of insurers’ portfolio concerns over the next 2-3 years. Those concerns were followed by liquidity risk, the domestic political environment and the impact of monetary policy.

The Federal Reserve’s expectation to reduce interest rates further in the next 12 months influences the investment strategy of nearly every insurer surveyed. Meanwhile, more than three-quarters of insurers surveyed said they anticipate an increase in inflationary pressures.

Most insurers expect positive equity returns in 2026, with 65% looking at returns of up to 10% and 19% expecting returns of more than 10%.

Risk appetite persists

Insurers’ risk appetite persists as caution emerges, said Jeremy Lachtrupp, Conning managing director of insurance solutions. More than half of insurers surveyed (57%) said they expect to increase their investment risk in the year ahead. This is a drop from the 62% who reported the same in 2025. More than three-quarters (76%) said they expect to extend their portfolio duration in 2026.

Insurer capital continues to shift beyond traditional fixed income, Conning found. More than half of insurers surveyed said they plan to increase their allocations in areas other than traditional fixed income, including 60% that said they will increase their allocations to asset-based finance and 57% that will raise their allocations to private equity.

Portfolio repositioning is driving higher portfolio turnover, with 73% of insurers reporting higher turnover in 2025.

Interest in private assets continues to increase for insurers, the survey found. Nearly 9 in 10 respondents (88%) expect private assets to exceed 10% of their total portfolio allocation within two years.

Liquidity remains adequate for most insurers, with 76% reporting adequate or excess liquidity.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.