Invesco Insurance Insights

This newsletter brings the latest topics impacting insurers, aimed to help those managing investment portfolios while considering an insurer’s business, regulatory and solvency needs.

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Welcome

For the second edition of our Invesco Insurance Insights for 2025, we take a more detailed look at the role alternative or private asset classes can play within the all-important asset allocation.

For the second edition of our Invesco Insurance Insights for 2025, we take a more detailed look at the role alternative or private asset classes can play within the all-important asset allocation.

We extend our analysis beyond a typical single strategy approach and illustrate how multi-alternatives exposure can bring added diversification benefits, help improve the resilience of insurers’ portfolios, and position them appropriately over a longer time horizon.

This analysis also takes into consideration aspects of expected returns and estimated capital charges (based on some simplified assumptions) for the indicated asset classes. The risk-reward profile can be tailored to meet insurers’ specific requirements as the allocation to the various underlying sub-strategies can be customized.

As always, please do not hesitate to reach out to us – your thoughts on such topics are always much appreciated.

Jaijit Kumar, Head of Asia Insurance Solutions  

Insurance Insights 2nd edition 2025

Invesco Insurance Insights 2nd edition 2025

In this second edition of Insurance Insights, Jaijit Kumar and Derek Fin take a deeper dive into private markets and alternative assets—areas that are increasingly capturing the attention of insurers in their asset allocation strategies. Watch the video to learn more.

Quick take: Insurance Insights 2nd edition 2025

Quick take: Insurance Insights 2nd edition 2025

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Transcript

Hello everyone, welcome back to this second edition of our Insurance Insights newsletter for 2025.

This time, we’re extending our asset allocation analysis to delve a bit deeper into strategies that we feel can further enhance the efficiency of insurance portfolios. We believe that certain private market asset classes can offer value over the longer term and lend themselves well to an insurance portfolio construct. What we focus on in this edition is extending the investment frontier by incorporating multiple alternative strategies as part of a systematic investment program.

As before, we hope you find this of use and we’ll be very happy to get your thoughts, insights, and suggestions around this topic, or indeed any other issues you are dealing with, and we look forward to receiving your feedback.

Thank you.

Insurance investment insights

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Insurance Insights

Benefits of a diversified multi-alternatives strategy

In this analysis, Jaijit Kumar, Head of Asia Insurance Solutions illustrates how the introduction of representative alternative asset classes can help improve the efficiency of insurance portfolios. He then uncovers how constructing a sub-portfolio of different alternatives strategies (“multi-alternatives”), has the potential to diversify an insurers portfolio, without significantly increasing the volatility/estimated risk charges. 

Previous editions

The macro outlook and implications for asset allocation

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Insurance Insights

Certainty over US policy direction is key

David Chao and Thomas Wu in Invesco’s GMS Office share their macro outlook for 2H 2025. They believe precise estimates of where tariff rates will settle, the timing of interest rate changes, and detailed inflation and growth forecasts, are heavily dependent on a more consistent sense of US policy direction. 

Related content

  • Investment risks

    The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Diversification and asset allocation do not guarantee a profit or eliminate the risk of loss.

    Invesco Solutions (IS) develops Capital Market Assumptions (CMAs) that provide long-term estimates for the behavior of major asset classes globally. The team is dedicated to designing outcome-oriented, multi-asset portfolios that meet the specific goals of investors. The assumptions, which are based on 5- and 10-year investment time horizon, are intended to guide these strategic asset class allocations. For each selected asset class, IS develop assumptions for estimated return, estimated standard deviation of return (volatility), and estimated correlation with other asset classes. Estimated returns are subject to uncertainty and error and can be conditional on economic scenarios.  In the event a particular scenario comes to pass, actual returns could be significantly higher or lower than these estimates.

    Vision

    Invesco Vision is a decision support system that combines analytical and diagnostic capabilities to foster better portfolio management decision-making. Invesco Vision incorporates CMAs, proprietary risk forecasts, and robust optimization techniques to help guide our portfolio construction and rebalancing processes.  By helping investors and researchers better understand portfolio risks and trade-offs, it helps to identify potential solutions best aligned with their specific preferences and objectives.

    The Invesco Vision tool can be used in practice to develop solutions across a range of challenges encountered in the marketplace. The analysis output and insights shown in the document does not take into account any individual investor’s investment objectives, financial situation or particular needs. The insights are not intended as a recommendation to invest in a specific asset class or strategy, or as a promise of future performance. For additional information on our methodology, please refer to our CMA and Invesco Vision papers. 

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