Insurance executives across Asia Pacific are accelerating into private markets. Within five years, the 150 executives surveyed by Clearwater Analytics  expect to allocate a third of their combined $3.8 trillion in assets to private debt, private equity, infrastructure and other alternatives up from 20% today.

The infrastructure supporting these ambitions, however, is not keeping pace.

Ninety-three percent of those same executives acknowledge that legacy technology is already constraining their business, even as they press forward with allocations that demand more from it, not less. The asset classes they are moving into fastest are the ones their systems are least prepared to handle.

“The firms that will lead the next phase of growth in Asia Pacific are already asking the right questions: does our infrastructure match our ambition, and does our scale allow us to compete as this market becomes more complex?” said Shane Akeroyd, Chief Strategy Officer and President of Asia Pacific, Clearwater Analytics. “Those that close the capability gap now are not just solving a technology problem. They are positioning themselves to lead what comes next.”

 The capabilities most critical to private market investing are the ones APAC insurers are least equipped to deliver across four key areas:

• Data integration: The foundation everything else depends on, ingesting and normalizing data across multiple systems and managers. Only 42% of firms rate their systems as excellent.
• Asset complexity: The single capability most essential to the portfolios they are building, and the lowest rated in the survey. Only 23% of firms are confident their systems can support it.
• Regulatory reporting: The #1 driver of technology spending, ranking 60% higher than the next priority. Yet fewer than half of firms rate their compliance reporting systems as excellent.
• Cross-asset risk aggregation: 86% say it is under-resourced, and 46% of third-party firms report that risk visibility has deteriorated over the past two years.