Despite expecting a more challenging macroeconomic environment marked by higher inflation, liquidity risk and lower Fed interest rates, U.S. insurers reportedly remain “optimistic” about investment conditions for 2026, according to Conning.
A new survey conducted by the firm in December 2025 found that 76% of respondents believe investment opportunities for insurers are improving.
Conning explained that the reasons for this increased risk appetite include higher yields for high-quality fixed income securities, attractive investment opportunities across a variety of private markets, and growing sectors, including both digital and traditional infrastructure.
While most insurers remain optimistic, the firm’s new survey highlighted that several “critical” challenges persist.
Notably, inflation has re-emerged as a top concern, rising to the second-highest risk after ranking seventh in last year’s survey.
Liquidity risk has also become a significantly higher priority, moving up the rankings after previously sitting well below other considerations, a shift that may reflect the growing allocation to private assets within insurer portfolios.
Elsewhere, market and asset price volatility was identified as the leading portfolio risk, while recession risk ranked third.
As per the survey, 57% of insurers expect inflation to increase moderately over the next 12 months, while 52% expect the yield on the 10-year Treasury to end the year below 3.5%.
Additionally, 47% of insurers say that Federal Open Market Committee actions will be significantly important to their investment strategy in 2026.
Still, Conning observed that insurers are detecting opportunities in private markets, high-quality fixed income and infrastructure, which will allow them to increase the investment risk necessary for growth in the year ahead.
Matt Reilly, managing director, head of Conning’s Insurance Solutions group, and author of the survey report, said, “An increasingly complex market requires insurers to balance heightened risk awareness with the need to adapt to shifting macroeconomic expectations. Choosing the right partners, tools, and investment strategies is critical in this environment.”
