A new global study reveals that insurance investment managers anticipate an increase in the risk profiles of their portfolios in the coming year, despite being cautious in the previous year. The majority of insurers and insurance asset managers (83%) believe that risk profiles will rise in the next 12 months, with 20% expecting a significant increase. The study conducted by Ortec Finance, a leading provider of risk and return management solutions for insurers, surveyed investment managers overseeing assets worth 10.48 trillion. Only 36 respondents noted an increase in risk profiles over the past year, while more than half (54%) reported no change, and 10% reported a decrease. The study found that the majority (91%) of participants stated that risks within their investment portfolios currently align with agreed risk parameters. Long-term liquidity risk was identified by 55% as the top risk, followed by 31% citing short-term liquidity risk, and 14% noting an equal concern for both long-term and short-term liquidity. The respondents ranked the possibility of a recession as the most significant macroeconomic risk, with liquidity deterioration and inflation following as the next crucial risks. Credit market volatility was perceived as the fourth most critical risk, preceding concerns about tariffs, trade wars, monetary policy changes, and deflation. Furthermore, equity market volatility and geopolitical tensions were highlighted as the eighth and ninth most substantial macroeconomic risks.
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