Insurers are increasing their appetite for higher risk investments despite challenging market conditions as they seek to boost earnings, according to an annual global survey for investment giant BlockRock.

The survey of 372 executives across 27 countries in insurance and reinsurance finds 47% plan to raise their portfolio risk exposures over the next one to two years, up from only 9% in last year’s report.

“Similar to 2017, insurers worldwide still see increased investment returns as primary means to boost profitability,” BlackRock Head of Financial Institutions Group Asia Pacific Kimberly Kim said. “What is different this year, however, is the marked change in insurers’ willingness to take risk.”

Property and casualty represented 19% of respondents by business line, while 22% were in life, 22% in health and the remainder across multiple lines, including reinsurance. Assets under management are estimated at $US7.8 trillion ($10.7 trillion).

BlackRock says the appetite for non-investment grade fixed income and illiquid alternatives is notable, while the inclusion of China-A shares in the MSCI Emerging Markets Index has increased interest in the growth potential of Asian markets.

Geopolitical concerns were a key concern for 30% of respondents, down from 71% last year, while concerns about other market risks, such as liquidity, asset price correction and interest rate risks eased.

Insurers say environmental, social and government factors are important, but practical obstacles are hindering their integration into the investment process.

“Having access to high-quality data, for instance, is one area that can prove challenging and requires an industry-wide response,” Ms Kim said.

Around 90% of respondents agree that regulators should provide clarity by defining environmental, social and government investments consistently on a global basis.