11% of U.S. insurers have invested or are interested in investing in cryptocurrencies

Insurance companies in the United States are most interested in investing in cryptocurrencies, according to a Goldman Sachs survey of 328 chief financial officers and chief investment officers around the world about their companies’ asset allocation and investment portfolios.

The investment banking giant recently released its annual Global Insurance Investment Survey, which includes responses to cryptocurrencies for the first time, finding that 11 percent of U.S. insurers expressed interest in investing in cryptocurrencies or are currently investing in cryptocurrencies.

Speaking on the firm's Exchanges at Goldman Sachs podcast Tuesday, Mike Siegel, Goldman's global head of insurance asset management, said he was surprised by the results:

“Our first survey on cryptocurrencies, I thought there would be no responses, but I was surprised. 6% of industry respondents said they were either investing in cryptocurrencies or considering investing in cryptocurrencies.”

Asia-based insurers are not far behind, with 6 percent expressing interest or investing in cryptocurrencies, compared to just 1 percent for European insurers.

Among the asset classes that insurers expect to offer the highest returns over the next 12 months, cryptocurrencies rank fifth, with 6 percent of insurers citing them as their top choice, ahead of U.S. and European equities, the report found.

About 2 percent of firms said they were currently investing in cryptocurrencies, while only a handful expressed interest, but Goldman analysts wrote that this level of interest is "still notable."

In the podcast, Siegel discusses follow-up surveys of crypto companies interested in cryptocurrencies to understand the motivations behind their purchases:

“We did some follow-up on this, and generally, companies that have invested or considered investing in cryptocurrencies do so to understand the market and the infrastructure. But if it becomes a tradable currency, they hope to have the ability to Cryptocurrency denominates policies and accepts cryptocurrencies for insurance premiums, just like they use dollars, yen, pounds or euros.”

Of all firms surveyed, only 1% said they would increase their cryptocurrency positions in the next 12 months; 7% said they would maintain their current positions; 92% said they would increase their cryptocurrency positions in the next year Will not invest in cryptocurrencies.

Despite the growing interest in cryptocurrencies, some remain pessimistic about them, with 16% of firms saying they expect cryptocurrencies to be the asset class with the lowest returns over the next 12 months. Overall, cryptocurrencies are the third-lowest asset class on this metric.

Mathew McDermott, global head of digital assets at Goldman Sachs, wrote in the report:

“As the crypto market continues to mature, coupled with increasing regulatory certainty, institutions across industries are increasingly confident in exploring investment opportunities and recognizing the disruptive impact of blockchain’s underlying technology. I’m increasingly interested in global asset managers. Surprised by the increased adoption of cryptocurrencies, they clearly recognize the potential of this market.”

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