As APAC’s insurers ramp up investment portfolio complexity so their own inhouse expertise comes under pressure.
Where once private markets and alternative investments were a more unusual feature, today’s portfolios are more often than not punctuated with private debt, private equity, and infrastructure allocations.
Meanwhile, a growing regulatory burden and a technological revolution shines a light on firms with specialist capabilities which are able to support overwhelmed insurers with their changing investment management demands.
No surprise then that our latest research with APAC insurance asset managers – representing $2.6 trillion in AUM across Hong Kong, Singapore, and Australia – found insurers are becoming far more comfortable handing a larger share of their assets to external managers.
Marking a significant shift from historic norms, 35% of respondents’ assets, on average, are managed externally, with the lowest share reported at 24% and the highest at 45%.
And rather than being driven to outsource by cost-cutting or skills shortages, this movement is rooted in something deeper: technology, transparency, and the pursuit of better control.
When asked to rank the reasons for outsourcing, the top motivator was an improvement in external managers’ reputations. Insurers say they are becoming more confident in the quality, capabilities, and reliability of specialist third-party managers.
Second was advances in transparency and reporting. Today’s managers offer real-time reporting dashboards, look-through data, and richer analytics which address many of the visibility concerns of the past.
Third was a desire to have greater control over portfolios. New technologies and investment platforms allow insurers to retain oversight of models, analytics, and risk factors even while the investments themselves sit with external partners.
Finally, insurers say better visibility enhances governance and decision-making. Improved data quality and transparency help insurers meet rising regulatory standards and strengthen ALM alignment.
Given the myriad benefits from outsourcing to third-party managers, looking five years ahead, APAC insurers overwhelmingly believe the trend will continue.
Two thirds (67%) questioned expect the share of externally managed assets to rise, while only 22% expect more assets to move back in-house and 11% believe the balance will remain unchanged.
It is clear that the outsourcing model is going from strength to strength.
External management is not about outsourcing responsibility; rather it is about deepening oversight and enhancing investment performance through modern tools and trusted partners.
APAC insurers are embracing external managers for reasons tied to strategy, governance, and technology, not simply operational convenience. With advanced platforms offering unprecedented transparency and control, external management is becoming a natural extension of insurers’ investment models.
This shift looks set to reshape how insurers build and manage portfolios across the region over the next decade. And for many, it could unlock new efficiencies, risk insights, and growth opportunities.