An annual report from analyst firm Goldman Sachs showed that one in 10 U.S. insurance companies is interested in investing in cryptocurrency.
The growing interest of U.S. insurance companies in investing in digital assets is documented in the eleventh annual report published by Goldman Sachs Insurance Asset Management.
The study included 328 investment and financial directors from insurance companies headquartered in the United States. The global balance of assets managed by the surveyed professionals is more than $13 trillion — their companies account for about half of the insurance industry worldwide.
The Goldman Sachs report on insurance investments first included questions about cryptocurrencies and their presence in insurance companies’ portfolios. According to the survey, 11% of U.S. insurance firms indicated either an interest in investing or current investments in crypto. The same figure for Asian insurers stands at 6% and for European insurers at only 1%.
The survey results concerning the ranking of asset classes regarding their expected profitability over the next 12 months were also revealing. In this context, 6% of insurance companies indicated cryptocurrencies as the most promising asset, more attractive from an investment point of view than traditional financial instruments. Globally, cryptocurrencies were among the top five preferred investment asset classes for U.S. insurance firms.
Goldman Sachs reports that approximately 8% of insurers are willing to continue investing in crypto-assets over the next 12 months, while only 1% have expressed a desire to forego cryptocurrencies as an insurance vehicle.
Exploring insurers’ motivations to invest in digital assets, Mike Siegel, head of the insurance asset management at Goldman Sachs, noted that “generally, the companies that are either invested or considering crypto are doing so to understand the market and to understand the infrastructure.” He also expressed confidence that insurers would be willing to increase their presence in the cryptocurrency market in the future if digital assets become a transactional currency.
However, 16% of American insurance companies still listed cryptocurrencies among the least promising for the coming year in the survey. Mathew McDermott, head of digital assets at Goldman Sachs, believes that regulatory certainty in the crypto market could positively impact the level of digital asset adoption as an investment vehicle for insurance firms.
Recall that investments in the crypto industry reached $30 billion in 2021, and the inflow of investments in cryptocurrency companies registered in Latin America increased almost 10 times in 2021. Analysts attribute the interest in crypto investing to the overall growth in the number of digital asset users.
