Insurers are becoming more optimistic about investment opportunities and are more likely to take on portfolio risk, according to a global Goldman Sachs Asset Management study.

But chief investment officers (CIOs) are more likely to increase overall portfolio risk than CFOs, who have more conservative views, the survey of 252 senior insurance professionals shows. Seven Australian industry managers participated in the survey.

About 41% of respondents plan to increase overall risk in their investment portfolio over the next 12 months.

The figure is lower in the Americas (33%) but higher in Europe, the Middle East and Africa at 56% and in Asia at 53%.

CIOs think equities will outperform fixed-income assets in the short term and intend to invest in assets that offer higher total return potential, interest rate protection or illiquidity premiums.

The number of CIOs who think investment opportunities are improving has risen to 31% from 14% last year.

Asian insurers are among the most optimistic; 58% say opportunities are improving and 92% predict equities will rise this year.

About 42% of Asian insurers think emerging-market equities will offer the highest returns in the next year, compared with 21% of CIOs globally. But they are also increasingly concerned about rising interest rates (32% compared with 16% last year).

Most CFOs think the industry is adequately or over-capitalised, but have mixed views on whether excess capital should be returned to shareholders, the survey shows.

“It’s clear insurers are feeling more optimistic, although there is still a good deal of caution,” Global Head of Insurance Asset Management Michael Siegel said.

“Insurers recognise the difficulty of generating adequate returns by holding predominantly high-grade portfolios.

“Lower investment returns have challenged the industry’s ability to deliver strong financial results, which has pressured insurance company equity valuations.”

The survey was conducted in February.