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Insurance Solutions

Navigating the Future: Key Investment Shifts in Life Insurance in 2024

May 2025 – 4 min read

In 2024, the life insurance industry continued to evolve, driven by strategic shifts in asset allocations and investment strategies. As insurers navigate a complex economic landscape, they are increasingly focusing on enhancing yield potential while managing risk.

Insurance companies have released their statutory filings for year-end 2024. The data reveals significant trends in credit quality, bond allocations, and mortgage investments, reflecting the industry's adaptive approach to achieving sustainable growth and financial stability. The following themes highlight the key areas of focus for life insurers as they strive to optimize their portfolios and meet policyholder needs.

1. Stability in Credit Quality

Bond allocations to the investment grade (IG) NAIC 1 & 2 classes (BBB- and higher) have continued to increase to 95.2%.1 Conversely, high yield allocations have continued to decline to 4.8%, reflecting the industry's cautious approach to maintaining high credit quality amid economic uncertainties—as well as the benign ratings downgrade environment.

Insurers are prioritizing investments in higher-rated securities to ensure portfolio resilience and mitigate potential risks associated with lower credit quality bonds. This trend underscores the industry's commitment to safeguarding policyholder interests and maintaining financial strength.

1. Source: S&P Global. As of December 31, 2024.

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Ken Griffin, CFA, ASA, MAAA

Head of Insurance Solutions, North America

The document is for informational purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service. The material herein was prepared without any consideration of the investment objectives, financial situation or particular needs of anyone who may receive it. This document is not, and must not be treated as, investment advice, investment recommendations, or investment research.

In making an investment decision, prospective investors must rely on their own examination of the merits and risks involved and before making any investment decision, it is recommended that prospective investors seek independent investment, legal, tax, accounting or other professional advice as appropriate.

Unless otherwise mentioned, the views contained in this document are those of Barings. These views are made in good faith in relation to the facts known at the time of preparation and are subject to change without notice. Parts of this document may be based on information received from sources we believe to be reliable. Although every effort is taken to ensure that the information contained in this document is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information.

Any forecasts in this document are based upon Barings opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Any investment results, portfolio compositions and/or examples set forth in this document are provided for illustrative purposes only and are not indicative of any future investment results, future portfolio composition or investments. The composition, size of, and risks associated with an investment may differ substantially from any examples set forth in this document. No representation is made that an investment will be profitable or will not incur losses. Where appropriate, changes in the currency exchange rates may affect the value of investments.

Investment involves risks. Past performance is not a guide to future performance. Investors should not only base on this document alone to make investment decision.

This document is issued by Baring Asset Management (Asia) Limited. It has not been reviewed by the Securities and Futures Commission of Hong Kong.

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