A recent study by Clearwater Analytics reveals that insurers across the Asia-Pacific (APAC) region are set to increase their risk profiles over the next two years. The research, which surveyed insurance asset management executives managing a total of $3.82t in assets, found that 85% of respondents expect their investment risk profiles to rise by 2027. This marks a continuation of a trend, as 72% reported increased risk profiles over the past two years.
Executives identified automation as the primary strategy for managing risk, surpassing the importance of increased regulation and stricter capital controls. Despite this, there are significant concerns regarding the allocation of time and resources towards portfolio analytics and risk management. Notably, 77% of executives believe more resources should be dedicated to regulatory and compliance tasks, whilst 86% see a need for increased focus on cross-asset risk aggregation.
Shane Akeroyd, Chief Strategy Officer and President of Asia Pacific at Clearwater Analytics, highlighted the growing risk appetite among insurers. He noted, “APAC insurers are embracing risk and plan to increase the risk profiles of their investments over the next two years. What’s striking is that whilst risk appetites are growing, executives are saying they need more resources for basic functions like regulatory compliance and risk integration.”
The findings underscore the need for advanced technology platforms to alleviate resource constraints by automating manual processes, thereby allowing teams to concentrate on strategic risk management. This shift could significantly impact how insurers in the region manage their portfolios and navigate the evolving financial landscape.
