Property and casualty insurers are ramping up private asset purchases just as pension funds and endowments retreat from alternative investments. Allstate, Liberty Mutual, and Nationwide each held at least 15% of their portfolios in private equity and hedge funds last year, according to S&P Global Market Intelligence data.

Other carriers including The Hartford, Chubb, and USAA more than doubled their private investment allocations over the past decade. This surge comes while many institutions question whether private fund returns will match historical levels, with some even selling stakes at discounts.

The timing reflects improving underwriting conditions. Property insurers posted their strongest gains in 2024 and 2025, driven by higher deductibles and stricter claims criteria that reduced payouts. These winning years have emboldened carriers to chase higher-yielding assets.

However, the strategy carries unique risks for property insurers. Unlike life insurers who can plan around predictable mortality rates, property carriers face unpredictable catastrophe costs from hurricanes and wildfires. This illiquidity mismatch makes private investments a calculated gamble that could strain reserves when major claims emerge.