APAC insurers boost high-value outsourcing, fuel captive center growth
SYDNEY, AUSTRALIA — Insurers across Asia and Australia are increasingly entrusting a larger share of their portfolios to external managers, signaling a normalization of high-value outsourcing in APAC’s financial services.
A report from Insurance Business Magazine says that the trend, driven by strategic, governance, and technological priorities rather than cost-cutting, is offering a strong precedent for growth in offshore shared services and captive centers in the region.
Strategic outsourcing becomes norm in APAC
According to a recent study by Clearwater Analytics, insurers in Australia, Hong Kong, and Singapore currently outsource an average of 35% of their portfolios to third-party managers.
“The use of third-party asset managers across APAC is set to accelerate as insurers become increasingly comfortable with the practice and seek [specialized] expertise for complex private market investments,” said Shane Akeroyd, chief strategy officer and president of Asia-Pacific at Clearwater Analytics.
The study, based on 150 interviews conducted in October 2025 by independent research firm PureProfile, found that 67% of respondents anticipate increasing the proportion of externally managed assets over the next five years.
Greater transparency, improved reporting, and enhanced oversight of investment portfolios were cited as the primary drivers, while cost reduction and staffing shortages ranked lowest.
“Generally, the shift is being driven by technology and the growing use of platforms which enable insurers to have the control and transparency they need. With 96% expecting increased M&A activity and private markets set to represent a third of allocations, external expertise becomes a competitive advantage,” Akeroyd added.
Private markets and tech drive outsourcing surge
The APAC trend mirrors a broader global surge in insurance outsourcing. Clearwater’s 2025 Insurance Investment Outsourcing Report found that external management of insurance assets worldwide reached $4.5 trillion, a 24% year-on-year increase, with private market allocations rising to $800 billion from under $50 billion a decade ago.
Insurers are integrating private and public assets within multi-asset portfolios, demanding stronger operational and analytical support.
More than 80% of managers now provide customized reporting, cash flow projections, accounting analytics, and regulatory support, often leveraging advanced technology platforms and AI-based analytics.
This shift demonstrates that high-value outsourcing is no longer a niche practice but a strategic cornerstone in APAC financial services.
As insurers rely more on external expertise for complex investments, the same dynamics are driving the growth of offshore shared services and captive centers, where financial institutions centralize specialized operations to achieve greater efficiency and control.
With the normalization of strategic outsourcing, APAC is emerging as a hub not only for innovative insurance investment practices but also for broader high-value financial services operations, positioning the region as a competitive leader in global outsourcing trends.
