The Connective Tissue: How Ratings Drive Global Capital

Start with the two giants, insurance and pensions.

Collectively, insurers and pension funds are amongst the most significant structural sources of infrastructure capital, with global aggregated assets of around $45 trillion and $40 trillion respectively.

They're liability-driven investment strategies, like infrastructure assets, as the longer durations offer a better match to their long-term liabilities.

One of the striking things is how little insurers historically allocated.

That's right.

Their allocation to infrastructure has been around a global median of just 1% of their investment portfolios, which is below their allocations to other alternatives.

Whereas a sample of large pension and sovereign wealth funds, or SWFs, have channeled an average 8% of their assets under management into infrastructure.

So the insurers have a long way to go to catch up, but the direction of travel is very clear.

It's set to grow.

Nuveen's end of 2025 surveys indicated 46% of insurance respondents planning allocation growth over the next two years.

And there's a policy dimension here.

Regulators actively want insurers in the space.

Yes, authorities in Europe and Asia increasingly view insurers as part of the solution to the funding gap, left by banks retrenching due to the increasing capital requirements, and fiscally constrained governments are cutting back discretionary spending, which only reinforces the need for alternative capital sources.

Start with the two giants, insurance and pensions.

Collectively, insurers and pension funds are amongst the most significant structural sources of infrastructure capital, with global aggregated assets of around $45 trillion and $40 trillion respectively.

They're liability-driven investment strategies, like infrastructure assets, as the longer durations offer a better match to their long-term liabilities.

One of the striking things is how little insurers historically allocated.

That's right.

Their allocation to infrastructure has been around a global median of just 1% of their investment portfolios, which is below their allocations to other alternatives.

Whereas a sample of large pension and sovereign wealth funds, or SWFs, have channeled an average 8% of their assets under management into infrastructure.

So the insurers have a long way to go to catch up, but the direction of travel is very clear.

It's set to grow.

Nuveen's end of 2025 surveys indicated 46% of insurance respondents planning allocation growth over the next two years.

And there's a policy dimension here.

Regulators actively want insurers in the space.

Yes, authorities in Europe and Asia increasingly view insurers as part of the solution to the funding gap, left by banks retrenching due to the increasing capital requirements, and fiscally constrained governments are cutting back discretionary spending, which only reinforces the need for alternative capital sources.