Australian Insurers Adjust Investment Portfolios as Inflation Concerns Subside

Private credit has emerged as a leading area of interest, with 45% of insurers planning to increase their global private debt investments, and 39% intending to expand their Australian private debt allocations in the next 12 months. This trend reflects a broader industry move towards embracing private markets and seeking differentiated sources of return.

Insurers are also focusing on enhancing credit allocations, diversifying private credit exposure beyond direct lending into asset-backed lending, and hedging credit spread risk using low beta strategies and dynamic overlays such as credit default swaps.

As the economic environment stabilizes, Australian insurers are proactively adjusting their investment portfolios to capitalize on emerging opportunities and mitigate potential risks.