Insurance investment managers less risk averse

Australia’s insurance companies have injected more risk into their investment portfolios, according to new research undertaken by Investment Trends for Janus Henderson.

The research reveals that concerns about a recession in Australia have fallen materially, and that many of the insurers are taking on additional risk in their portfolios and are sitting much closer to risk budgets than they were this time last year.

According to the research 43% of respondents said that they are now currently in line with their risk budget, compared to only 13% of insurers last year.

The research analysis said that over the past 12 months as the investment environment had become more certain, insurers had taken on more risk in their investment portfolios.

However, it also noted that one in three insurers were still slightly under their risk budgets, with life and general insurers taking a more conservative stance than health insurers.

The research found that, in 2024, three out five insurers had outsourced the majority of their investments to external managers and that one in every two insurers managed their investment portfolio with “a liability conscious mindset” while retaining discretion to be able to add value in how they approach their fixed income allocations.