Why 2024 Was a Turning Point for Insurers’ Investment Strategies

In 2024, U.S. insurers leaned more heavily on outsourced investment management than ever before. According to a new report from the National Association of Insurance Commissioners (NAIC), more than half of all insurers now outsource some or all of their investment decisions—and the number is still climbing.

The reason? Markets are getting more complex. Managing money in this environment takes deep expertise, strong tech, and a sharp understanding of regulations. For many insurers—especially smaller ones—it’s easier and smarter to bring in outside professionals.

The Numbers Behind the Shift

At the end of 2024:

53% of U.S. insurers were outsourcing investment management (up from 51% in 2023)
The total number of outsourcing insurers rose to 2,415
Small firms (under $250 million in assets) made up two-thirds of this group

The trend is clear: outsourcing is no longer the exception—it’s becoming the norm.

Why Insurers Are Outsourcing More

There are three big reasons insurers are shifting to outsourced investment management:

Expertise: As portfolios move beyond traditional bonds into areas like private credit, real estate, and structured products, insurers need specialists who know these markets inside and out.
Cost efficiency: Building a full in-house investment team is expensive. Outsourcing gives insurers access to top-tier talent without the overhead.
Compliance: Regulations are getting stricter. Outsourced managers often have the systems and reporting tools needed to stay on top of complex rules and capital requirements.

Insurers Are Putting Big Trust in Their Managers

Most insurers aren’t spreading their investments across a long list of managers. Instead, they’re forming deeper partnerships:

90% of outsourcing insurers gave at least 10% of their portfolio to one manager
75% outsourced more than half of their entire portfolio

This shows a high level of trust in external providers—and a shift toward more long-term, strategic relationships.

Who’s Leading the Way

Property and casualty insurers are the most active outsourcers, making up nearly 60% of all activity. These firms often face tighter capital rules and more investment restrictions, so they turn to external managers to help maximize returns within those limits.

Smaller insurers are also driving growth. Many don’t have the scale to justify building an internal investment team, so outsourcing is the fastest way to stay competitive.

The Bigger Picture: A $4.5 Trillion Trend

This isn’t just a U.S. phenomenon. Globally, insurers outsourced a record $4.5 trillion in assets in 2024—a 24% increase from the year before. More of that money is going into alternative investments like private markets, infrastructure debt, and structured credit—areas where specialist managers shine.

What This Means for Asset Managers and Finance Firms

If you’re in asset management or specialty finance, this trend matters. It’s creating real opportunities to work with insurers—but the expectations are high.

To succeed, you need to offer:

Deep expertise in complex or alternative asset classes
Strong compliance and risk management practices
Tech-enabled reporting and transparency
The ability to tailor strategies to insurance capital rules

Insurers aren’t just looking for performance. They want reliable partners who understand their world and can deliver consistent value.

The Bottom Line

The outsourcing surge in 2024 wasn’t a fluke—it was a signal. Insurers are rethinking how they manage money, and many are deciding that external partners are the best way forward.

For firms that can offer the right mix of skill, service, and trust, this shift opens the door to long-term partnerships in a growing, evolving market. Outsourcing isn’t just a tool anymore—it’s a strategy.