Private Assets and Alternatives Gain Ground Among Life and Annuity Insurer
July 23, 2025
Growing Product Demand, Elevated Interest Rates and Pursuit of Yield Spur Insurers to Expand Investment Universe
HARTFORD, CT – July 23, 2025 – New analysis from Conning, a leading global investment management firm serving the insurance industry, tracks the ongoing shift in investment strategies across the life and annuity sector. Titled “Private Assets, Alternatives Gain Ground: Evolving Investment Strategies in the Life and Annuity Insurance Sector,” the report highlights how insurers are increasingly embracing private assets and alternative investments to enhance income and meet the demands of a growing and changing market.
The report shows that life and annuity insurers, once reliant primarily on traditional fixed-income investments, continue to expand their portfolios across a wide spectrum of other assets. For example, industry-wide allocations to private placements, mortgage loans, real estate and Schedule BA asset classes have risen to 38% of total portfolios from 30% in 2018. Private placements experienced the most meaningful growth, rising to 19% of portfolios from 13% in that same period. The trend is consistent across insurers of all sizes; for example, smaller insurers, traditionally more conservative, increased their allocations to private placements to 8% from 2% during that period.
The evolution is being fueled in part by the return of higher interest rates, which has restored the appeal of more traditional fixed-income assets and enhanced insurers’ crediting rates. Coupled with macroeconomic tailwinds — including the expected demand in 2024-27 from “Peak 65” (when a record number of Baby Boomers will turn 65), increased reinsurance capacity and continued product innovation — insurers are finding new ways to strengthen their financial footing.
“Insurers are clearly adapting to a more complex investment landscape,” said Cindy Beaulieu, Chief Investment Officer – North America at Conning and one of the report authors. “They are deploying more sophisticated, diversified strategies that not only capture additional yield but also better align with long-term liability structures. This diversification reflects a broader shift in how insurers think about risk and resilience.”
Matt Reilly, Head of Conning’s Insurance Solutions group and a co-author, adds that the expanding investment palette for insurers also requires greater diligence. “Rising allocations to less-liquid assets also require robust risk management frameworks, particularly in light of potential market volatility and evolving regulatory environments.”
Conning anticipates continued asset growth in the life and annuity industry, with insurers focusing on high-yield, long-duration opportunities to meet long-term obligations. The firm navigates an era of elevated rates and increased capital demands.
To learn more about the evolving investment strategies in the Life and Annuity Insurance sector read the full report here.
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ABOUT CONNING
Conning is a leading investment management firm and with affiliates has $176 billion in global assets under management as of June 30, 2025.* With a long history of serving insurance companies and other institutional investors, Conning supports clients with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America. Conning is part of Generali Investments.
* As of June 30, 2025, includes Conning, Inc., Conning Asset Management Limited, Conning Asia Pacific Limited, Conning Investment Products, Inc., Goodwin Capital Advisers, Inc. (collectively, “Conning”), and Conning subsidiaries Global Evolution Asset Management A/S, Octagon Credit Investors, LLC, and Pearlmark Real Estate, LLC and its subsidiaries (collectively “Affiliates” and together with Conning, “Conning & Affiliates”).
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Media Contacts
Alyssa Gittleman
Conning
+1 860-299-2288
alyssa.gittleman@conning.com