Inflation, Tariffs Main Concerns Among Senior Investment Pros

The possibility that tariff wars will create a knock-on effect leading to higher inflation over the next year is by far the biggest concern among insurance companies during that time period, according to BlackRock’s annual “Global Insurance Report.”

“Inflation remains a key concern, particularly with the renewed imposition of tariffs and their potential ripple effects,” the report stated. “Escalating geopolitical tensions and increasing market fragmentation are also shaping insurers’ investment strategies and outlook.”

The report also noted that the sustained higher-interest-rate environment, combined with ongoing regulatory developments, is forcing insurance firms to adjust their strategies “to navigate a rapidly evolving landscape.”

The report analyzed a survey of 463 senior investment professionals at firms representing an aggregate of $23 trillion in assets under management. It found that 63% of those surveyed cited inflation risk when asked what they consider to be the “most serious macro conditions” affecting their companies’ investment strategy during the next 12 months. This is a big jump from last year, when inflation risk ranked fifth, with only 46% of insurers saying it worried them the most.

With respondents able to select more than one option, “rising geopolitical tension and fragmentation” was a distant second, with 50% naming it as their biggest concern. A “high-rate environment” was cited by 42%, while “regulatory developments” and “recession risk” were cited by 40% and 35% of respondents, respectively. In last year’s survey, the top concern among insurance companies was regulatory developments, cited by 68% of respondents, followed by rising geopolitical tensions and a high-rate environment at 61% and 58%, respectively, while 50% cited the risk of a recession.

This year’s report also found that insurance companies have lost their appetite to increase risk, down to just 12% in 2025 from 60% in 2021. However, they are still eating up private market investments, with 30% of insurers saying they expect to increase their allocation to the asset class over the next 12 months and only 12% reporting they plan to cut back on private assets. Some 79% said they plan to raise their allocation to private markets by 1% to 5%; 13% said they expect to increase their exposure to private markets by 6% to 9%; and 1% said they plan to boost their private assets by at least 10% over the next 12 months.

Within private markets, insurance companies reported the most interest in single-strategy direct lending, named by 39% of respondents, followed by special situations/opportunistic investments at 38% and citing infrastructure debt at 37%.