/en/sysglobalassets/digital/institutional-investor-study/blue-overview.svg

Institutional Investor Study

Geopolitics and investor expectations

Overview

Private Assets

Sustainability

Schroders’ third annual Institutional Investor Study analyses the investment perspectives of 650 institutional investors, of which 156 respondents were from insurance companies. These insurance companies are collectively responsible for $9.8 trillion in assets and were sourced from 20 different countries.

The Study provides a snapshot of insurers’ key areas of focus and concern including the macroeconomic and geopolitical climate, return expectations, asset allocation and attitudes to private assets and sustainable investing.

Three key conclusions drawn from this year's study are:

52%

cite macro and geopolitical risks as their greatest concern to portfolio performance in the next 12 months vs. 31% in 2017.

56%

of insurers are looking to increase their exposure to Private Assets over the next three years.

78%

believe Sustainability will play a more important role in the next five years.

Insurance companies believe geopolitical turbulence will have a significant influence on a portfolio’s investment performance for the next 12 months

Geopolitical turbulence

Higher interest rates

Higher interest rates is considered the most influential on portfolio performance this year but its importance has declined since 2017

62% of insurance companies expect annual total return expectations above 5% over the next five years

Above 10% return

5-9% return

1-4% return

Yet confidence in achieving return expectations has dropped since 2017 reflecting a more uncertain macroeconomic climate

61%

2017

54%

2018

51%

2019

Despite this expectation for high returns, generating income was identified as the most important investment objective globally for the next 12 months

Generating income

Funding liabilities

Meeting cashflow requirements

2019

2018

2017

Insurers are reaching out for customised solutions to meet their investment objectives

70%

Insurers say their organisation is comfortable adopting new financial instruments or asset classes

55%

Insurers state Liability Driven Investment (LDI) is crucial to managing their investments

The need for solutions is being driven by an increased appetite for risk management strategies

2019
2018
2017

Diversifying across asset classes & geographies
Increasing allocations to fixed income
Increasing use of alternative investments
Risk budgeting
Currency hedging
Derivatives
Managed volatility strategies

83%
66%
58%
52%
51%
44%
31%

79%
50%
54%
44%
46%
41%
31%

88%
65%
53%
30%
43%
52%
30%

Download full report (PDF 2.43MB) Private Assets Sustainability

Schroders commissioned CoreData to conduct the third Institutional Investor Study to analyse the world’s largest investors’ key areas of focus and concern including the macroeconomic and geopolitical climate, return expectations, asset allocation and attitudes to private assets and sustainable investing. 156 insurance investors, representing a total of $9.8 trillion in assets under management, were taken from a broader pool of 650 institutional investors with approximately $25.4 trillion in assets across North America, Europe, Latina America and Asia-Pacific. Respondents were sourced from 20 different countries.

Contact Schroders

Schroders is a world-class asset manager operating from 37 locations across Europe, the Americas, Asia, the Middle East and Africa.

Worldwide locations

For any further questions, please use our online contact form.

Contact form

For specific queries, please visit the insurance team page.

Insurance team

Please remember that the value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

This marketing material is for professional investors or advisers only. This site is not suitable for retail clients.

Issued by Schroder Investments Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered No: 1893220 England. Authorised and regulated by the Financial Conduct Authority.

© Copyright 2022 Schroders plc