<p><i>The Goldman Sachs Asset Management 14<sup>th</sup> Annual Global Insurance Survey Finds Majority of Insurers Expect Private Credit to Generate Highest Returns Over Next Year</i></p>
<p>&nbsp;</p>
<p>(New York, March 25, 2025) – Amid a changing geopolitical landscape, a majority of insurers are again very concerned about the impact of inflation on their portfolios: 52% cite inflation as a significant macroeconomic risk to their investments. This is up from 42% in 2024 and nearly reaches 2023’s levels, according to the <i>Global Insurance Survey: The Great Pivot, </i>Goldman Sachs Asset Management’s 14<sup>th</sup> annual global insurance survey.</p>
<p>Despite the implications rising inflation and slowing economic growth could have on markets, demand for private assets remains strong, as 58% of insurers report planning to increase allocations to private credit during the next 12 months.</p>
<p><i>The Great Pivot </i>features responses from a record number of insurance company CIOs and CFOs (405) whose combined assets total more than $14 trillion, approximately half of the balance sheet assets across the global insurance sector. The survey, which seeks to identify emerging trends within the global insurance industry, was conducted from January to February 2025. Key focus areas include strategic asset allocation adjustments, trends in liquidity management, and sustained commitment to technological advancements.</p>
<p>“Our 14th Annual Global Insurance Survey shows insurers are navigating evolving macroeconomic concerns by rotating toward asset classes with the potential to provide both attractive risk-adjusted returns and diversification benefits,” said Mike Siegel, Global Head of Insurance Asset Management and Liquidity Solutions for Goldman Sachs Asset Management. “Amid this industry-wide rotation, important new trends in liquidity management may be developing.”</p>
<h3>Inflation Concerns Back on Top</h3>
<p>With policymakers across the globe revisiting approaches to trade, immigration and taxation, the potential impact inflation may have on portfolios returns to the top of the list of investment risks. According to the survey, the top five macroeconomic issues that pose the greatest risk to insurers’ investment portfolios are:</p>
<ul>
<li>Inflation (52%)</li>
<li>Economic slowdown/recession in the US (48%)</li>
<li>Credit and equity market volatility (47%)</li>
<li>Geopolitical tensions (43%)</li>
<li>Tariffs/trade disputes (32%)</li>
</ul>
<p>“As investors wait for policy clarity, many are concerned with the prospect of markets simultaneously confronting rising inflation and slowing economic growth in the US,” continued Mr. Siegel. “However, with 76% of insurers reporting the 10-Year US Treasury Yield will be between 4% and 5% at year-end 2025, a range consistent with the past year, we expect underlying inflation to continue to fall and our US growth outlook remains optimistic.”</p>
<p>“While views on the Euro area and China are more pessimistic, actionable investment opportunities exist for discerning investors seeking to improve their risk-adjusted returns.”</p>
<h3>Growth of Private Assets Shows No Signs of Slowing</h3>
<p>When asked which asset classes will provide the highest total return during the next 12 months, insurers were bullish on private assets – private credit (61%) topped the list for the second consecutive year. The top five was rounded out by:</p>
<ul>
<li>US equities (57%)</li>
<li>Private equity (55%)</li>
<li>Private equity secondaries (30%)</li>
<li>High yield debt (28%)</li>
</ul>
<p>“The private credit market has experienced a significant transformation during the past decade,” said Matt Armas, Global Head of Insurance for Goldman Sachs Asset Management. &nbsp;“We expect it will continue to expand in 2025. Through this growth, insurance companies will have ample opportunities to diversify their direct lending portfolios while pursuing attractive risk-adjusted returns.”</p>
<p>The lion’s share of insurers expect positive returns for the S&amp;P 500 Index in 2025 (83%). However, after posting gains of 25% in 2024 and 26% in 2023, this year’s forecasts are tempered: 50% expect the S&amp;P 500 to return between 5-10% and just 15% forecast returns between 10-20%.</p>
<p>Within fixed income, 35% of insurers expect to increase their duration risk in 2025 – down from 42% one year ago. The shift suggests cautious optimism that the interest rate environment will remain attractive for yield-seeking investors.</p>
<h3>Asset Allocation Changes Point Toward Privates</h3>
<p>A bullish private asset outlook has many insurance companies planning to raise allocations:</p>
<ul>
<li>58% to private credit</li>
<li>40% to investment-grade private debt</li>
<li>36% to asset-based finance</li>
<li>32% to infrastructure debt</li>
<li>29% to private equity</li>
</ul>
<p>Meanwhile, only 17% of insurers plan to increase allocations to US equities, and even fewer (10%) to European equities.</p>
<h3><b>Increasing AI Adoption Drive Industry Consolidation</b></h3>
<p>Operational synergies and economies of scale were identified by 68% as the primary drivers of increased merger and acquisition (M&amp;A) activity across the insurance industry. The increasing adoption of Artificial Intelligence (AI) to improve efficiencies could prove to be a catalyst for further consolidation: 90% report currently using, or are considering utilizing, AI; this is up from 80% in 2024. Of those planning to adopt AI, 81% cited reducing operational costs as its primary benefit.</p>
<p>“As artificial intelligence technology evolves and improves, it will undoubtedly leave a lasting imprint on insurers across the globe,” said Mr. Armas. “Some improvements will benefit risk underwriting and operational efficiencies, which could have broader industry implications as firms navigate evolving opportunities and challenges.”</p>
<h3>Methodology</h3>
<p>The 14<sup>th</sup> Annual Goldman Sachs Asset Management Global Insurance Survey questioned 405 insurance company Chief Investment Officers (CIOs) and Chief Financial Officers (CFOs) about the economic environment, asset allocation decisions, return expectations, portfolio construction, and industry capitalization. We received responses from 338 CIOs and senior investment professionals, 53 CFOs and senior finance managers, and 14 individuals who serve as both CIO and CFO. The insurance companies surveyed have more than $14 trillion in balance sheet assets combined, representing about half of the balance sheet assets for the global insurance sector. The participating companies represent a broad cross section of the industry in terms of size, lines of business, and regions. Responses were collected from January 16 to February 7, 2025.</p>
<h4>About Goldman Sachs Asset Management Insurance:</h4>
<p>Goldman Sachs Asset Management manages $460 billion in general account assets on behalf of insurance clients as of December 31, 2024. Our insurance capabilities include partial to full outsourcing solutions involving fixed-income strategies, alternative investments, and equities. The group offers a suite of advisory services including asset liability management, strategic asset allocation, capital-efficient investment strategies, and risk management.</p>
<h4>About Goldman Sachs Asset Management</h4>
<p>Goldman Sachs Asset Management is the primary investing area within Goldman Sachs (NYSE: GS), delivering investment and advisory services across public and private markets for the world’s leading institutions, financial advisors and individuals. The business is driven by a focus on partnership and shared success with its clients, seeking to deliver long-term investment performance drawing on its global network and deep expertise across industries and markets. Goldman Sachs Asset Management is a leading investor across fixed income, liquidity, equity, alternatives, and multi-asset solutions. Goldman Sachs oversees more than $3.1 trillion in assets under supervision as of December 31, 2024. Follow us on <a href="https://www.linkedin.com/showcase/goldman-sachs-assetmanagement/posts/?feedView=all">LinkedIn</a>.</p>
<p><b>Media Contact<br>
 </b>Victoria Zarella&nbsp;<br>
<a href="mailto:Victoria.Zarella@gs.com">Victoria.Zarella@gs.com</a></p>
<p>&nbsp;</p>
<p><span class="disclosure-text"><sup>1</sup>Assets Under Supervision (AUS) includes assets under management and other client assets for which Goldman Sachs Asset Management does not have full discretion.</span></p>


2025 Global Insurance Survey Press Release

Insurers Make Strategic Asset Allocation Adjustments as Inflation Concerns Return to the Forefront

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