Australian insurers are showing increased risk appetite, with new research from Janus Henderson Investors revealing that nearly half plan to increase their portfolio risk over the next year. The 2025 Australian Insurance Report, which gathered insights from 20 leading general, life, and health insurers, found that 47 per cent intend to take on more investment risk in the year ahead. Among those insurers currently underweight their risk budgets, 70 per cent are planning to increase their exposure.
The shift is reportedly driven by a stabilising economy and cooling inflation, encouraging insurers to look beyond traditional assets in search of stronger returns and better diversification. More than half of the respondents already invest in the private credit sector, with global direct lending being the preferred avenue. Asset-backed lending is also gaining traction, due to its lower duration and collateral-based risk approach.
Unlisted infrastructure and short-duration corporate credit are becoming increasingly popular as insurers seek to boost returns while managing volatility. Despite this increased appetite, risk budgets remain tight. As of this year, 50 per cent of insurers were underweight, a rise from 40 per cent in 2024.
Notably, geopolitical tensions have overtaken inflation and recession as the primary concern for investors. Eight in ten insurers have either reviewed or are currently reviewing their strategic asset allocation in response to these tensions. Janus Henderson manages $176.5 billion in insurance assets globally. Janus Henderson Group is a global financial services company dedicated to helping clients define and achieve superior financial outcomes through differentiated insights, disciplined investments, and world-class service. They provide investment solutions for institutions, intermediaries, and individual investors worldwide.
