About half of all insurers in an international survey believe the investment climate has deteriorated.

This growing pessimism – up from 36% last year – is prompting more insurers to de-risk their portfolios, with 17% planning to do so, up from 10%, the Goldman Sachs Asset Management study shows.

They plan to reduce holdings of equity and credit assets, to increase portfolio liquidity.

Risk appetite has fallen to -1% net from +16% net last year.

“The survey saw a return of scepticism regarding the investment opportunity set,” Goldman Sachs says.

“With rates expected to rise and equity valuations high, insurers are concerned with achieving adequate returns without leaving their portfolios overexposed in the event of a downturn.”

A US slowdown or recession, financial market volatility and rising inflation are the top three macro-risks weighing on insurers’ minds.

Political events – the top risk last year – has slipped to sixth spot.

“Concerns about low yields and political events have given way to the more typical concerns of the late cycle, such as economic slowdown and recession in the US, US monetary tightening and volatility in equity and credit markets,” Goldman Sachs says.

The finance giant interviewed 300 CIOs and CFOs from insurance companies this month, including 55 from the Asia-Pacific region, for its annual Insurance Asset Management survey.

The insurers have more than $US10 trillion ($13.2 trillion) in balance sheet assets and more than one-third of the industry’s global assets.