How P&C Insurers Are Rethinking Investment Strategy

Conning recently put together an overview of how P&C insurers are rethinking their investment strategy amidst strong underwriting performance, continued premium growth, and higher investment income. We spoke with Conning to highlight certain aspects of P&C insurers' investment strategy in 2026 (and going forward).

Nicholas Girardi, CAIA | Director, Consultant Relations | Conning
nicholas.girardi@conning.com | Learn More >>

SAA: Investment strategy is becoming a key differentiator again. What’s fundamentally changed versus the past few years, and where do you see P&C insurers most at risk of being behind the curve?

Conning: What's fundamentally changed is the combination of a moderating earnings backdrop and a much broader investment opportunity set. Over the past several years, strong underwriting results, premium growth, and rising interest rates created favorable conditions for many P&C insurers. As those tailwinds begin to abate, portfolio outcomes will increasingly depend on active decisions around asset allocation, sector selection, and portfolio construction.

At the same time, insurers have access to a wider range of investment solutions, including structured credit, private placements, private credit, and asset-based finance. As a result, the challenge is shifting from simply generating yield to effectively balancing return, liquidity, capital efficiency, and risk.

Where insurers risk falling behind is less about access to opportunities and more about implementation. The differentiator increasingly will be the ability to integrate a broader opportunity set within a disciplined portfolio framework rather than relying primarily on traditional public fixed income allocations.

SAA: How have you seen P&C insurer’s approach or consider private credit vs. life or other carriers?

Conning: Private credit has become an increasingly important allocation for many P&C insurers, though the approach often differs from that of life insurers. While adoption continues to vary across the industry, P&C insurers generally emphasize structures that align with their capital, liquidity, and regulatory considerations.

As a result, exposure is often gained through rated or structured formats, including insurance-oriented vehicles, CLOs, and asset-based finance solutions, rather than through large allocations to direct, unrated lending. This reflects a broader trend of integrating private credit within the overall credit portfolio rather than treating it solely as an alternatives allocation.

Overall, P&C insurers are approaching private credit in a more capital-aware and liquidity-conscious manner, focusing on income generation and diversification while maintaining alignment with broader portfolio objectives.

SAA: If you were sitting in a CIO seat today for a P&C insurer, what’s one change you would prioritize over the next 12 months to better position the portfolio for the next cycle?

Conning: The opportunity set is broader than it has been in years, from structured credit to private markets, but success won't come from simply adding new asset classes. The insurers best positioned for the next cycle will be those with a disciplined framework that allows them to allocate across opportunities while remaining aligned with enterprise constraints. In our view, future outperformance will come less from taking more risk and more from balancing competing objectives more effectively.

If interested in learning more, please refer to Conning’s Viewpoint: P&C Insurer Investment Strategy: Portfolio Trends Shaping the Next Market Cycle | Conning

Source: Strategic Asset Alliance, Conning. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of information cannot be guaranteed.