An unstable equilibrium: resilience in a fragile world
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The defining feature of today’s environment is not imminent crisis, but fragility. Adrian Grey, Global Chief Investment Officer, Insight Investment looks at how markets have absorbed a great deal of noise, but the balance rests on a narrow set of supports.
Changes in Germany's institutional investment market
German institutional investors will place even greater emphasis on safer, high-quality investments. Strategies like long-term credit, liability-driven investment (LDI) and cashflow-driven investment (CDI) have become more appealing.
Living longer: what it means for our health, work, and retirement
Over the last 100 years, life expectancy has risen dramatically.
Longer lives don’t necessarily mean healthier lives.
People working for longer helps a country’s finances.
Follow the rhythm of financial markets with Insight Investment
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Gareth Colesmith, Head of Global Macro Research, Insight Investment explores how the neoliberal era, built on globalisation, independent central banks, deregulation and monetary dominance, is now giving way to a new framework.
Changing economic orders: the rise of neofiscalism
Macro matters
Industry innovation
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Sarthak Pattanaik, Chief Data and Artificial Intelligence Officer, BNY gives his views on how BNY has focused on cultivating an AI-literate workforce, and how AI technology is changing how firms operate, make decisions and deliver value to clients.
AI as a foundation for financial services
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Insight in the news
AI and digital assets. Colm McDonagh was quoted by the Irish Business Post on the bond issuance outlook for global AI companies. Read more in "Irish head of Insight Investment on why big-name AI bonds are catching investors’ attention"
BUSINESS POST. 11 December 2025
Money markets. Chris Brown spoke with Institutional Money discussing why money market funds fulfil their function as a stabilising portfolio element. Read more in "Insight Investment: Geldmärkte robust, weiter Rückenwind durch Zinsen" (German language)
INSTITUTIONAL MONEY. 22 April 2026
Building resilient portfolios. Andrew Stephens is featured in an article by IFA Magazine on building resilient portfolios with active fixed income management. Read more in "Building resilient portfolios with active fixed income management"
IFA MAGAZINE. 19 January 2026
UK fiduciary. Insight’s new £1.3bn fiduciary management mandate with the Qinetiq Pension Scheme was covered by Pensions Expert. Read more in "Insight takes over £1.3bn Qinetiq scheme as fiduciary manager"
PENSIONS EXPERT. 2 March 2026
Cashflow-driven investment. Massimo Young published an article in Advisor Perspectives, discussing retirement income and the price of certainty. Read more in "Securing Retirement Income: What Does Certainty Cost?"
ADVISOR PERSPECTIVES. 27 October 2025
Municipal bond ETFs. Thomas Casey discusses municipal bond ETFs with Asset TV, noting that they are booming with investor demand surging in 2026. Read more in "Municipal Bond ETFs are Booming, With Opportunity in Some Overlooked Places?"
ASSET TV. 8 April 2026
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New terrain, enduring lessons
The global economy is entering unfamiliar territory. Raman Srivastava, Insight CEO notes how these challenges are not new, but their interaction is destabilising. Right now, resilience and adaptability matter more than ever.
Digital assets: a new frontier
Digital assets are often framed as radical or disruptive. Colm McDonagh, CEO, Insight Europe, dives deeper into the reality. Digital assets' most powerful impact is likely to be more subtle: changing the plumbing of financial markets, rather than the fundamentals of investing itself.
Insight Investment is committed to tackling food insecurity and reducing waste. Our UK charity partner The Felix Project and FareShare shares how surplus food is being turned into social and environmental impact.
Delivering impact through partnership
Nowadays, many people don’t have a reliable, defined pension from their employer. Katrina Morrisson, Head of Business Development UK & Ireland and Paul Richmond, Deputy Head of Solution Design at Insight Investment ask: is there a way for retirees to have it all – security, flexibility, and growth?
Flex and fix: solving the retirement challenge for individuals
Strong governance does not have to slow innovation.
Data are only valuable when organised and connected.
Speed matters – delaying can increase risk.
KEY FINDINGS
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You can find more of Insight's Global Macro Research analysis and investment perspectives are available to professional contacts here.
Professor Sarah Harper, CBE, University of Oxford and Howard Kearns, Longevity Director, Insight Investment unpack lifestyle trends leading to longer lives that present challenges for both society and the economy.
Diversification. Harvey Bradley was in Investor Daily on de-dollarisation noting that institutions, central banks and asset managers are actively reducing their US dollar exposure in favour of diversification. Read more in "De-dollarisation is gradual but real: Insight Investment"
INVESTOR DAILY. 17 March 2026
Credit allocation. Brendan Murphy spoke with Asian Private Banker about how Asian wealth investors are eyeing “spicier” credit allocations in 2026. Read more in "Asian wealth investors eye 'spicier' credit allocations in 2026: BNY Investments"
ASIAN PRIVATE BANKER. 28 January 2026
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Digital assets. Francesca Fornasari in Investor Daily addressing how blockchain, tokenisation and cryptocurrencies could underpin the most significant evolution in market infrastructure. Read more in "Stablecoins and the ‘sleeping giant’ revolutionising markets"
INVESTOR DAILY. 11 May 2026
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COLM MCDONAGH
CEO Insight Europe
JILL HIRZEL
Senior Investment Specialist
SHAHEER GUIRGUIS
Head of Secured Finance
ERIN SPALSBURY
Head of US Investment Grade
When assets start to move at the speed of markets The opportunity in digital assets isn’t about new coins or higher returns – it’s about how faster settlement reshapes the plumbing of the financial system. By placing assets and cash on chain, ownership transfer, settlement and collateralisation can increasingly happen at the same moment, rather than days apart. For fixed income investors, that shift is profound. Near instant settlement reduces the need to hold idle cash, improves liquidity management and materially lowers counterparty risk, particularly during periods of market stress.
Europe’s energy hangover The European growth renaissance story has clearly been challenged by the energy price shock, prompting us to downgrade our growth forecasts for 2026 and 2027. A prolonged period of elevated energy costs now raises the possibility that the ECB could be forced into rate hikes, even as underlying growth momentum weakens. Paradoxically, that risk leaves us more constructive on European bonds further out the curve, particularly around the five- and ten-year mark, where higher short term rates could ultimately amplify growth concerns and support duration.
Volatility is providing new opportunities In a risk off environment marked by spread widening and reduced liquidity, European ABS is demonstrating its defensive characteristics, benefiting from the typically more senior, shorter dated nature of the exposure. Volatility creates opportunities to reallocate capital into situations which we believe offer more attractive risk return characteristics. Wider spreads allow us to add selectively across both primary and secondary markets, incrementally adding to yield while maintaining overall credit risk exposure at a comparable level.
Markets are recalibrating to a higher-for-longer policy backdrop The conflict in the Middle East has pushed up absolute yields in investment grade credit, and we believe this presents an opportunity to add to US credit holdings. Fundamentals remain resilient, with double digit earnings growth and elevated levels of supply being met by strong demand. Although we’re wary that M&A risks are rising at this point in the cycle, we believe free cash flows are high enough to offset an upward creep in leverage levels.
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Insight's Global Macro Research analysis and investment perspectives are available to professional contacts on our websites and are highlighted on our LinkedIn feeds.
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STANZA Issue 1
There are growing concerns because governments and central banks have fewer options for dealing with economic challenges. Central banks have already gone much further than usual with their policies. After the global financial crisis and again during the pandemic, they lowered interest rates to zero or even below zero, and kept them at these low levels for prolonged periods. What began as emergency support became a semi‑permanent feature of the system. Keeping interest rates so low for so long changed the way people and businesses behave. It encouraged borrowing and taking on debt, and made it easier to ignore financial risks. Now, as policies shift back to normal, these problems are becoming more obvious. Government spending faces similar difficulties. In the past, budget deficits were mainly caused by economic ups and downs, but now they have become a permanent feature. With rising interest payments, governments have to spend more and more just to pay off their debts. In the US, the cost of paying interest on debt is now higher than what is spent on defence, which historically has made it harder for governments to respond to economic and strategic challenges. With austerity politically difficult, governments have few credible options. Inflation appears the least painful adjustment mechanism left to them.
Policy at the limits
These changes in the financial markets are connecting to bigger social and political divisions. Rising asset prices benefit those who already own financial assets, while households reliant on labour income face higher living costs without sharing proportionately in market gains. This has led to a bigger gap between the rich and the poor, especially in the US, but also in many other developed countries. Over time, this growing inequality has caused frustration and anger, leading to more support for populist ideas, economic protectionism, and a move away from traditional free-market policies, especially among younger people.
Inequality and political change
What began as emergency support became a semi‑permanent feature of the system.
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Even though the economic environment is changing, financial markets have remained strong. Stock markets are still near their highest levels, investments considered risky have managed to handle several challenges, and long-term government bond rates have stayed fairly steady. This is unusual. Central banks have made it easier to borrow money for the short term, but interest rates for long-term loans have not changed much, which has led to a bigger difference between short-term and long-term rates rather than lowering all rates equally. At the same time, equity performance has become increasingly concentrated. A narrow group of US mega‑cap technology stocks now accounts for a disproportionate share of global equity returns.
Calm markets, uneasy foundations
For much of the post‑war era, investors operated within a remarkably stable framework. Global trade expanded, populations grew, and although government debt was rising it remained manageable. The US dollar anchored the system, supported by deep capital markets and American strategic dominance. That world is now fading. The global economy is entering unfamiliar territory, shaped by three powerful forces: deglobalisation, adverse demographics, and persistently high debt levels. None of these is new, but their interaction is proving destabilising, while the policy tools used to manage them are increasingly stretched.
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There is, however, a plausible upside scenario: a productivity revival driven by artificial intelligence. AI investment is occurring at an extraordinary scale. Capital expenditure by large technology firms now runs into the hundreds of billions of dollars annually – rivalling historic infrastructure booms. The build‑out of AI infrastructure is boosting demand for skilled labour, supporting wages in parts of the workforce that rarely benefit from financial market booms. Over time, productivity gains could lift trend growth, easing fiscal pressures without resorting to inflationary outcomes. History suggests such gains arrive with a lag. The question is whether they arrive quickly enough, and at sufficient scale, to offset the structural headwinds now facing the global economy.
A narrow upside path
This is why inflation continues to sit at the top of the risk map. Monetised fiscal expansion was always intended to be temporary, but balance sheets expanded dramatically and have proved hard to shrink. Money supply growth, while volatile, remains elevated by historical standards. The real risk is that we could slowly end up living in a world where inflation stays high for a long time. Governments may use inflation as their only practical tool for dealing with debt problems that seem impossible to fix otherwise.
Why inflation remains the core risk
For now, we are in an uncertain transition period. The old framework has lost credibility, but the new one has yet to fully emerge. Markets have remained calm, but the margin for error is thin. For investors, the challenge is not to predict a single outcome, but to recognise that the old certainties no longer apply. It’s time to prepare for a world in which resilience, and adaptability matter more than ever.
Navigating the transition
Source: Bloomberg as at 14 January 2026.
Inflation remains above central-bank targets
Source: US Federal Reserve as at 31 October 2025. Top 1% = 99th to 100th wealth percentile.
Wealth inequality continues to increase
Source: Bloomberg as at 2 March 2026.
Equities have rallied to record highs
Raman Srivastava, Insight CEO
For investors, the challenge is not to predict a single outcome, but to recognise that the old certainties no longer apply.
Financial markets have proved remarkably resilient over the past year. Despite tariffs rising to levels not seen since the 1930s, persistent geopolitical shocks and mounting fiscal strains, risk assets have largely looked through the noise.
Credit markets reflect a similar tension. Spreads sit near 20‑year lows, suggesting a limited valuation cushion, yet absolute yields remain near multi‑decade highs. In other words, while the extra reward for taking risk is low, the total return you can earn from bonds is still unusually high.The challenge for investors is balancing income generation with resilience. One clear response is to keep maturities short. Credit curves are exceptionally flat, offering little reward for extending duration, while short‑dated investment‑grade and high‑yield credit capture the bulk of available income with lower sensitivity to volatility. Being flexible is equally important. The extra rewards for taking risks are not the same everywhere. Some types of risk are expensive, but better deals can be found in emerging markets or in more complicated investments, especially those backed by assets like loans or property. Asset‑backed securities continue to offer structural value, reflecting regulatory frictions, lower liquidity and the specialist expertise required. Even within the asset class, opportunities vary widely, from consumer receivables to infrastructure assets linked to the AI build‑out, such as data centres with long‑dated, high‑quality tenants.
Credit markets: income with resilience
Government bonds: time for relative value to shine
On the positive side, heavy investment in artificial intelligence (AI) – such as spending on data centres and computer chips – is giving the economy a significant boost. This increased spending is helping companies make more money and pushing stock markets higher, which makes people feel wealthier. That, in turn, has helped sustain consumer spending, particularly in the US. However, there are also negative factors. Higher tariffs and uncertain government policies are making it harder for businesses (outside of technology) to invest and hire new workers. While these problems don’t show up much in the overall numbers, they’re having an impact behind the scenes: investment in non-technology sectors is slowing down and the job market is starting to cool. Policymakers have responded to this loss of momentum, but the balance remains delicate.
Growth support versus policy drag
Higher tariffs and uncertain government policies are making it harder for businesses to invest and hire new workers.
Rising public debt is a defining feature of current backdrop. In the US, large and persistent fiscal deficits show little sign of correction, and Treasury issuance has increasingly shifted toward short‑dated bills. While this helps reduce costs for now, it also means the government will have to renew these loans more often, increasing the risk that it might face problems refinancing its debt in the future. In short, the average length of time before the debt needs to be repaid is getting shorter. At the same time, global central-bank policy has diverged. The US and UK have cut rates as labour markets cooled; the eurozone was early to act and has already moved to a neutral level; Japan remains an outlier, still tightening policy after decades of ultra‑easy conditions. We don’t believe it’s wise to take strong bets on how long interest rates will stay high or low in the current market. Instead, the best approach is to focus on trades that compare the value between different types of bonds, making the most of the differences and changes in the market.
Adrian Grey, Global Chief Investment Officer
Beneath that calm surface, however, two opposing forces are pulling the global economy in different directions. The result is an unstable equilibrium – a delicate balance that could last for a while, but which could easily be unsettled by even a small shock.
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More details on our approach and efforts in ABS markets are available on www.insightinvestment.com
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The defining feature of today’s environment is not imminent crisis, but fragility. Markets have absorbed a great deal of noise, but the balance rests on a narrow set of supports. For investors, the priority is not predicting the precise moment that equilibrium gives way. It is ensuring portfolios are resilient enough to withstand the shift when it comes. Shorter‑dated credit, absolute‑return strategies, looking for hidden opportunities, and carefully managing exposure to different currencies could all play a role.
Prioritising resilience
The US dollar sits in its own form of unstable equilibrium. Structurally, the dollar faces growing challenges from fiscal deficits and long‑term debt dynamics. Historically, these problems have been balanced out by strong US economic growth, higher interest rates compared to other countries, and the dollar’s unrivalled reserve‑currency role. Recently, when financial markets have been unsettled, investors have turned to the dollar because it is easy to buy and sell and seen as safe. There is no other currency that can quickly replace the dollar, so a sudden fall in its value is unlikely. If the dollar does weaken, it will probably happen slowly over time. Still, history shows that after long periods where the dollar’s value doesn’t change much, it can make a sharp move, and the next big change could be quite dramatic.
The dollar’s delicate balance
Forecasts are based on current market assumptions and are not guaranteed; actual outcomes may differ. Source: Citi research as at 30 September 2025.
AI spending is likely to boost growth significantly
Source: Macrobond as at 7 January 2026.
Global economic activity is outperforming versus the US
Market data and illustrations are for information only and do not represent forecasts or recommendations. Source: Bloomberg and Insight as at 26 December 2025.
Short-dated corporate bonds capture most of the yield of longer-dated assets
Source: Congressional Budget Office and Insight as at 9 January 2026.
The US debt/GDP ratio is set to rise to historic levels
Navigating the new era of sovereign risk
Economic orders are not permanent. Capitalism evolves through long cycles, oscillating between periods dominated by markets and periods where the state plays a more active role. The defining question facing investors today is whether we are passing through another of those transitions. Insight’s view is that we are.
In the past, growth could rely on expanding labour forces. In the future, it cannot.
Gareth Colesmith, Head of Global Macro Research
The neoliberal era, which was built on globalisation, independent central banks, deregulation and monetary dominance, is giving way to a new framework. This emerging order places fiscal policy back at the centre of economic management and involves greater state involvement in shaping outcomes. We describe this shift as neofiscalism.
Fiscal dominance is back
Since the pandemic, governments are spending more, running larger deficits, and doing so irrespective of where the economy sits in the business cycle. Fiscal expansion has become structural rather than temporary. We see several factors that will add to spending pressures in the years ahead, including ageing populations, rising defence spending, climate transition costs, migration pressures, and the social consequences of automation and artificial intelligence. Central banks remain formally independent, but they operate in an environment increasingly shaped by fiscal needs. That creates tension. Political pressure on monetary policy tends to rise as debt-servicing costs increase, raising the risk of financial repression – periods when interest rates are held at artificially low levels to ease government finances, often at the cost of higher inflation later.
What this means for investors
Neoliberalism delivered falling inflation, declining interest rates and powerful tailwinds for financial assets. Neofiscalism looks very different. A world of fiscal dominance, deglobalisation and demographic pressure is likely to be more volatile, more fragmented and more inflation‑prone. Inflation may not spiral permanently higher, but it is unlikely to return to the consistently low levels seen over the past two decades. Country outcomes will diverge more sharply, depending on fiscal credibility and policy quality. The winners of the next decade are unlikely to resemble those of the last.
Global Macro Research from Insight
Insight’s Global Macro Research analysis and investment perspectives are available to professional contacts on www.insightinvestment.com
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Perhaps the most underappreciated pressure shaping the new order is demographics. Across most advanced economies, and now extending to China, working‑age populations have peaked or are shrinking. In the past, growth could rely on expanding labour forces. In the future, it cannot. Productivity becomes the only sustainable source of growth. AI may help offset this drag, but it also risks labour disruption, reinforcing political pressure for redistribution rather than labour‑market reform.
Demographics tighten the constraint
Global trade has also entered a new phase. The long era of globalisation, which was accelerated by China’s accession to the World Trade Organization, lowered costs and boosted corporate margins, but came at the expense of industrial capacity and labour markets in many advanced economies. The political backlash is now entrenched and bipartisan in the US. Tariffs and reshoring are structural features of the new order. Over time, trade barriers function as a tax on growth, leaving economies more inward‑looking and less efficient. Alongside this, industrial policy has returned as a core geopolitical tool. Governments are actively directing capital toward sectors they deem strategically important. The US approach has been short‑term and transactional. China’s strategy is long-term and systematic.
Deglobalisation and industrial policy
Shifts in economic orders are almost always accompanied by changes in money. The move to fiat currencies in the 1970s gave central banks enormous latitude to expand money supply, underpinning asset-price inflation during the neoliberal era. That system remains intact, but it is evolving at the margins. Digital money and settlement systems represent the most visible change. Early private cryptocurrencies exposed the instability of decentralised money. Governments are now adopting the technology selectively: the US is leaning toward regulated stablecoins, China has pursued a central bank digital currency, and Europe prioritises financial stability and privacy, while the UK has focused on tokenised bank deposits. History suggests that money is ultimately too important for states not to control. Private experimentation tends to come first, but successful innovations are eventually folded into state‑backed frameworks.
Money is evolving
Source: Yale Budget Lab as at 24 February 2026.
The sharpest increase in US tariffs in at least a century
Source: Digital money: multipolar, 20 August 2025, HSBC.
The main components of money
Source: Piketty-Zucman and Insight.
The coupon on US debt is now above GDP growth
Source: Macrobond, Insight calculations as at January 2026.
On the cusp of a new economic order
Private money
Central bank money
Commercial bank money
Digital money
Fiat money
Commercial bank reserves at central bank
Cash
Deposits
Loans
Unpegged cryptocurrencies
Retail central bank digital currencies
Bank-issued stablecoins
Privately issued stablecoins
Tokenised deposits
Wholesale central bank digital currency
Germany is one of Europe’s largest investment markets, with assets under management exceeding €4 trillion1. Within the country’s three‑pillar pension system – comprising the state pension, occupational pensions and private pensions – occupational pensions have become an increasingly important source of retirement income. Structural change is the dominant force shaping the German pension landscape. Demographic ageing, driven by declining birth rates and rising life expectancy, places growing pressure on the statutory pension system, which operates on a pay‑as‑you‑go basis. As the number of contributors falls while pension obligations continue to rise, funded pension arrangements are gaining importance, most notably occupational pension provision. The German pension market is highly fragmented. Rather than being dominated by a small number of very large asset owners, it is characterised by a broad base of mid‑sized institutional investors, strong governance frameworks and a pronounced focus on risk control. The system is also heavily outsourced, with around three quarters of institutional assets managed by external investment specialists.
Rising interest rates have also significantly improved funding levels for German corporate defined benefit (DB) pension plans. This has materially reshaped how companies think about pension risk management and has brought a clearer focus on long‑term endgame outcomes. For DAX companies, the 40 largest companies listed on the Frankfurt Stock Exchange, the average funding ratio has risen materially in recent years – reaching around 93% in 2025, up from 82% a year before, according to Mercer. This progress is driven in part by higher interest rates, which are used to value pension plans’ future obligations, as well as investment performance. One clear consequence is that risk reduction has moved to the top of the agenda. Many companies are now prioritising the protection of healthier balance sheets against adverse market movements. This marks a broader shift away from an asset‑only mindset toward a more holistic focus on balance‑sheet risk management.
How German corporate pension plans are changing their approach
...reducing risk has moved to the top of the agenda for many plans, which are adjusting their allocations to bonds to more closely match their future pension obligations...
More details on our efforts to innovate and help individuals and pension plans achieve their goals are available on www.insightinvestment.com
Frank Diesterhöft, Head of German Branch and Co-Head of Distribution for Germany and Austria
One important risk often remains less fully hedged: longevity. If pensioners live longer than expected, benefit payments continue for longer, and pension plan liabilities rise – as we consider in our article on the topic. Ways to hedge longevity risk do exist, but this remains a less developed feature of the German market than in the UK, where longevity risk transfer is more established. The result of these trends is a market that is still focused on effective governance, and is balance sheet-aware and disciplined, but is no longer static. Better funding is not ending the conversation, but it is changing it, by placing greater emphasis on how institutional investors – including pension plans – might best shape their future.
The next step – addressing longevity?
Since the sharp rise in interest rates in 2022, the market has undergone a meaningful shift. For many years, low interest rates drove investors into a wider search for assets that offered more attractive return potential. But now that interest rates (and therefore bond yields) have risen, fixed income has moved back to the centre of portfolio construction for many institutions. Liquid bond strategies, in particular, have regained appeal. Demand has been strongest for actively managed euro and global corporate bond strategies, spanning both benchmark‑oriented approaches and “buy‑and‑maintain” strategies, which focus on holding bonds to maturity as long‑term investments. Across the market today, the preference is for quality, resilience and capital preservation, with a strong bias towards investment grade bonds.
Rising rates have driven a significant transition
A second area of attention is governance, as economic and geopolitical uncertainty, and market volatility, is sharpening the focus on decision-making structures that allow pension investors to respond quickly when markets move. A third important trend is the shift from managing risks on paper to meeting pension payments in reality. As pension plans mature and funding levels improve, German corporates are increasingly moving from an accumulation mindset toward paying out pensions. This is leading more plans to turn their attention to cashflow‑driven investing. Rather than focusing primarily on market values, the emphasis is increasingly on building portfolios that generate predictable income streams, aligned with expected pension payments, to ensure benefits can be paid smoothly and reliably over time.
Alexander Kleinkauf, Co-Head of Distribution and Head of Solution Sales for Germany and Austria
Source: Bloomberg, as at 31 December 2025. Yield of the ICE BofA Euro Corporate Index.
European corporate bond yields have risen – transforming pension plans’ fortunes
Better funding is not ending the conversation, but it is changing it
1 Source: BVI.
Longer lives and fewer children being born mean there are challenges for both society and the economy. One solution is to rethink how we work and retire. People aged 50 to 70 today are healthier, better educated, and more skilled with technology than ever before. Many want or need to keep working. Companies can benefit from having people of different ages working together. Older workers bring valuable skills. Keeping people working longer also helps the country’s finances by increasing tax income and reducing the pressure on pension systems.
Work and retirement need rethinking
Most of the increase in life expectancy has happened because people are getting chronic diseases later, not because these diseases are gone.
Professor Sarah Harper, CBE University of Oxford
People are living longer than before, and this affects the way we live and work. It's important to know why life expectancy is going up, how healthy those extra years are, and what this means for society. Over the last 100 years, life expectancy has risen dramatically. For example, in Japan, people aged 60 can expect to live longer than those in the UK or US. Women usually live longer than men, almost everywhere. First, public-health measures helped us live longer, and now, medical and scientific advances are making a big difference. Even though the pandemic caused a drop in life expectancy, research shows that this is already improving. People in different countries live longer for many reasons – it's not just about genetics. What we eat, how much we exercise, how often we socialise, and even how much sunlight we get all play a part. For example, the Mediterranean lifestyle, which includes healthy food and lots of social activity, helps people in southern Europe live longer than people in the UK.
More details on our efforts to innovate and develop personalised bond investing at scale are available on www.insightinvestment.com
Why we're living longer
In the UK, there are about 14,000-15,000 people aged 100 or older1, and by the end of the century, this number could reach around 1.5 million. This is a huge change in just a few generations. But are those extra years healthy? Socioeconomic factors make a big difference. A 65-year-old man living in a poor area may reach 80 but could spend much of his later years in poor health. In richer areas, people often live into their late 80s and enjoy more years of good health. Most of the increase in life expectancy has happened because people are getting chronic diseases later, not because these diseases are gone. Changing your lifestyle can make a big difference, even for older adults. Research shows that switching to a healthy diet can add more than 10 years to a young person's life, and even someone in their 80s can gain a few extra years by eating better and reducing risks of heart disease, cancer, and diabetes. However, problems like obesity and dementia are becoming more common. While fewer people at certain ages are getting dementia, the total number will still go up as the population gets older. This puts more pressure on families, health systems, and pensions.
Living longer versus living healthier
Source: World Health Organization. Based on latest data as at end 2021.
Life expectancy varies across populations due to biology, diet and lifestyle
Living longer means pension providers will have to pay more over time, and individuals need to plan carefully for retirement. Insight has worked with experts to find ways for defined benefit pension schemes to manage the risk of pensioners living longer, and they are now discussing new methods that aim to be more efficient than traditional approaches. For individuals, planning for a long retirement is difficult. An annuity, which gives you a guaranteed income for life, is one option, but it isn’t flexible and doesn't let your money grow. Insight has been working on new ways to help people have a flexible and stable retirement, as we explain in this article on the topic. We hope that as people live longer, everyone can make the most of their retirement and feel confident about their future.
Longevity and pensions
Howard Kearns, Longevity Director
1 Source: Office of National Statistics.
Katrina Morrisson, Head of Business Development UK & Ireland
Paul Richmond Deputy Head of Solution Design
Is there a way to have security, flexibility, and growth? We have developed an approach intended to support the delivery of a salary replacement through retirement. It is designed to support longer-term retirement planning, so retirees know what they can spend, and includes the flexibility to pursue growth in their retirement assets, if that’s what is desired. Importantly, this approach seeks to minimise the risk of members running out of money while retaining flexibility to change their plans.
Source: Insight Retirement Income Member Survey. Censuswide, 2 January to 8 January 2026.
A recent survey of 1,000 people aged 55-70 showed this struggle between wanting flexibility and wanting security
said they want a secure income as they get older
Everyone’s retirement is different. Some people want steady income right away, while others prefer a big lump sum later. Using this information, we can build a portfolio providing potential for income and growth, with cashflows timed to meet an individuals’ needs. The framework is comprised of two strategies: one that focuses on delivering reliable cashflows, and another that also incorporates potential for growth, and investors can fine-tune the allocation between these to reflect their priorities. For many people, we understand that feeling secure is important, especially as they get older. That is why the framework builds in the option to purchase an annuity in later life, to provide a guaranteed income at the right point in time. This mixed approach aims for income replacement and growth earlier on in retirement, retaining the flexibility to adjust, shifting to safety and peace of mind later. The result is an approach that aims to help retirees plan spending with greater confidence.
Creating a retirement plan that fits you
Our approach: an illustration
Insight has been looking at using fixed income portfolios – mainly bonds and other assets with set returns – to replace a salary for retirees, matching each person’s needs. Bonds are useful because they give predictable income (regular interest payments) and return the money you invested. If you choose bonds and similar investments carefully, you can set up a portfolio that looks to pay you what you need, when you need it. This method is reliable and flexible. This approach is different because it does not lock you into one strict plan. Instead, you can change your portfolio if your needs change. If you need more income or want to change how you withdraw money, you can adjust the portfolio. The goal is to lower the risk for people who use investments for retirement income. Since bonds pay out at certain times, the investor doesn’t have to worry about selling investments at the wrong time, which could reduce their retirement savings.
How the framework uses fixed income to replace a salary in retirement
We are increasingly applying our expertise in retirement solutions to create new approaches for individuals in the retail and wealth markets. The approach described here is intended for use within UK defined contribution workplace pension plans. It is similar in principle to Insight’s approach for US retirees, which also looks to deliver set retirement income cashflows regularly over time through Insight’s separately managed account (SMA) platform. It uses scalable technology infrastructure combined with our leading fixed income expertise to support customised institutional-quality bond portfolios, with capacity to do so concurrently for hundreds of thousands of individual investors. We have developed an innovative framework that seeks to provide a dependable income-like replacement throughout retirement, giving members clarity on what they can afford to spend while still allowing them to seek additional growth in their assets if they choose. Crucially, the approach aims to reduce the likelihood of running out of money, yet preserves the flexibility for retirees to adapt their plans as circumstances change.
Making retirement funding easy and accessible
Since bonds pay out at certain times, the investor doesn’t have to worry about selling investments at the wrong time, which could reduce their retirement savings.
87%
said they want to be able to take out some of their money during retirement
68%
ENABLE GROWTH TO DELIVER Utilise full time horizon
NO NEED FOR A CASH BUFFER Retain full flexibility
KNOW WHAT YOU CAN SPEND Spend with greater confidence
INCOME DESIGNED FOR THE LONG TERM Enjoy income through retirement
In doing so, we believe this approach can offer several potential benefits for retirees and pension providers.
Flex then Fix
Member income is calculated on a yearly basis considering relevant member and market data
Spending with confidence: Flex
Spending with confidence: Fix
Age 65
Age 80
15 years
Flex: rigorous payout methodology
Fix: annuitising at the optimal time
The purpose of any pension is to provide a salary replacement for those entering retirement. Simple as this sounds, the reality can present significant challenges. For many people who are planning for retirement, the choices can be overwhelming. Nowadays, most people don’t have a reliable, defined pension from their employer, so retirees face a difficult decision between two options. An annuity guarantees income but lacks flexibility, has limited opportunity to grow and cannot be reversed. The traditional alternative is an investment portfolio, which offers flexibility and the chance for growth – but if you have to sell your investments when the market is down, you might miss out if the market goes up again, meaning you could end up with less money in the long run.
Artificial intelligence may be the most important and fundamentally powerful technology reshaping financial markets around the world. In addition to serving as a tool that helps people work faster, AI is increasingly changing how firms operate, make decisions and deliver value to clients. At BNY, we are embedding AI deeper into every part of our enterprise to unlock scalable, sustained impact.
Financial services have relied on technology for a long time. Early systems were deterministic, strict and rules-based. For example, payment systems were designed so that the same input always gave the same output. These systems were dependable, but often rigid and difficult to adapt without adding more rules. Things changed with machine learning. Instead of programming every step, systems could learn from past data. This helped with tasks such as identifying fraud or predicting trends, but these models usually produced a prediction or classification, rather than a contextual explanation. Generative AI is a bigger step forward. It can write text, summarise information and analyse content using large volumes of training data. This means machines can provide context and support interpretation, not just generate outputs. Over time, these capabilities may become more adaptive and more useful across a wider range of tasks, but even today AI is already changing how work is done.
From rules to reasoning: how AI has changed
Extraction: Using AI to find important information from large amounts of complex or unstructured data, such as dates or names in legal documents. This is now one of the more mature AI use cases. Reasoning: Models not only find data but also interpret it and perform calculations, such as estimating future payments from bond documentation. Autonomy: AI can support action with human oversight. For example, it can help identify the most likely intended payment instruction when data quality is poor, and route exceptions for human review. Innovation: AI allows organisations to test new ideas, support more tailored portfolio design and improve decision-making at scale. Advanced functions: AI can support larger parts of end-to-end workflows, such as reconciliation, by reducing manual effort in complex, repetitive tasks.
The five stages of AI adoption in financial services
The future of AI in financial services is not about one dramatic moment. It is about continuous improvement, where technology, people and processes grow together.
Sarthak Pattanaik, Chief Data and Artificial Intelligence Officer, BNY
At BNY, our focus on both scale and enablement. We invested early and with great care in building our enterprise-wide AI platform, Eliza, giving all employees access to its capabilities. Over the past 18 months, BNY has focused on cultivating an AI-literate workforce, and with 99% of employees trained to use Eliza today, we are now focused on deepening AI proficiency for all employees. Instead of limiting AI to specialist teams, it is being applied broadly across platforms, including client service, operations, risk and investment management. Examples include supporting the client-onboarding process, validating transactions, assisting reconciliation, analysing NAV anomalies and strengthening credit-risk analysis. In some cases, parts of workflows that used to take hours can now be completed in minutes, with active human oversight still in place to make the final decisions. BNY’s focus has evolved from building the foundation, to deepening usage, and now to reimagining processes, datasets, code and product development lifecycles through the application of AI. The future of AI in financial services is not about one dramatic moment. It is about continuous improvement, where technology, people and processes grow together. Organisations that embrace AI and treat it as a core capability will be better positioned to shape what comes next.
Rewiring the organisation: what the future looks like
More details on our efforts to innovate are available on www.insightinvestment.com
At BNY we see our AI journey in five stages, each one building on the last:
From rules we follow to intelligence we build
Three main lessons:
Among the many innovations enabled by digital assets, tokenisation stands out as a fundamental shift in how financial instruments are created, transferred, and managed. Tokenisation involves representing traditional assets, such as bonds, equities, or money market funds, as digital tokens on a blockchain or similar distributed-ledger technology. This process not only preserves the underlying economic characteristics of the asset, but also unlocks new efficiencies and capabilities. It is tempting to dismiss digital assets by pointing out that most money and securities are already “digital”. A bank balance, after all, exists only as an electronic entry. The difference is where and how that entry is recorded. In the traditional system, balances sit on centralised ledgers controlled by individual institutions. However, on‑chain assets are discrete units created and transferred within a network, governed by code rather than by intermediaries. That change does not automatically improve returns. What it improves is speed, programmability and interoperability. These characteristics become particularly powerful when applied to familiar instruments such as bonds or money market funds. Tokenising a bond does not alter its credit risk or cashflows – but it makes it instantly transferable and allows the automation of coupon payments or settlement.
More than digital versions of existing assets
Digital assets sit at the intersection of genuine structural change and considerable hype. The challenge is distinguishing between the two.
Colm McDonagh, CEO of Insight Europe
Digital assets are often framed as radical or disruptive. In reality, their most powerful impact is likely to be more subtle: changing the plumbing of financial markets rather than the fundamentals of investing itself.
Put simply, digital assets are electronic records that show who owns something or how much it's worth. These records are kept on systems like blockchains, which are not controlled by any single bank or company. Instead, a whole network of computers checks and confirms who owns what, using secure technology. This is important, not because the current way of keeping records is faulty, but because blockchains allow us to do things that older systems could never manage. They offer new possibilities for handling money and assets that weren't possible before.
Much of modern finance still relies on manual processes, extended settlement cycles, and repeated reconciliation between parties. These frictions increase cost, slow response times, and create settlement risk – issues that remain largely invisible until markets become stressed. Moving assets on‑chain has the potential to compress settlement from days to minutes. When settlement risk falls, the need for precautionary cash buffers also falls. Capital that would otherwise sit idle can be deployed more efficiently. For investors, this improves portfolio agility. Assets can be sold, collateral posted, and positions rebalanced far more quickly than under a traditional market set-up. This becomes particularly valuable during periods of volatility.
Why plumbing matters
What really makes digital assets special is their ability to be programmed. With smart contracts, financial products can automatically do things like pay out income, rebalance portfolios, or adjust collateral when certain conditions are met. This means institutional investors can set up portfolios that react automatically to rules they've chosen, so people can spend less time on routine tasks and more time managing risks or making important decisions. This is no longer theoretical. Tokenised money market funds already exist and represent the first genuine foothold for institutional adoption. Their appeal lies in a simple combination: low risk, immediate liquidity, and easy integration with digital cash such as stablecoins.
Programmability and portfolio design
Despite the momentum, expectations need to be realistic. Not every asset benefits from being tokenised, and not every investor needs to operate on‑chain. The most likely outcome is a long‑lasting hybrid system, where traditional and digital infrastructure coexist. Some instruments will migrate on‑chain because the additional functionality justifies the change; many others will not.
A hybrid future, not a revolution
Digital assets come with new risks to how things work and how they are seen by others. Even if the financial risk stays the same, the systems behind them are different. Blockchains are not all built the same way, so institutions must carefully check their safety, reliability, ability to handle growth, how they are managed, and how they deal with financial crime. Picking the wrong platform can damage their reputation. Decentralisation does not eliminate the role of trusted intermediaries. Instead, it changes what they are trusted for. Custodians, transfer agents, and service providers remain central – particularly because they can invest in compliance, cybersecurity, and risk frameworks far beyond the reach of individual investors.
Managing new assets
Digital assets sit at the intersection of genuine structural change and considerable hype. The challenge is distinguishing between the two. The real story is not about replacing the financial system overnight, but about gradually modernising how assets move, settle, and interact. That process is already under way, starting with cash‑like instruments and extending beyond in time.
Separating signals from noise
Decentralisation does not eliminate the role of trusted intermediaries. Instead, it changes what they are trusted for.
An interview with Will Savage, Head of Corporate Partnerships, The Felix Project and FareShare
Insight Investment is committed to tackling food insecurity and reducing waste. Here, our UK charity partner The Felix Project and FareShare shares how surplus food is being turned into social and environmental impact.
Every year in the UK over 10 million tonnes of food is thrown away. Around 60% of this is generated by people in their own homes, but the other 40% is generated by the food industry. This includes retail, hospitality, manufacturing and at the farm gate – a lot of this is potentially edible food. The Felix Project and FareShare is a charity that works to address this issue. We sat down with their Head of Corporate Partnerships, Will Savage, to hear more. “I think everyone should find food waste facts shocking – that is a lot of food, and it is made even worse when you think about the damage this does to the environment and how many people struggle with food insecurity. It really is inspiring to watch how The Felix Project has tackled this 'rubbish issue',” said Savage. The Felix Project was set up in 2016 by Justin and Jane Byam Shaw in memory of their son Felix, who aged 14 tragically passed away from meningitis in 2014.
Tackling the 'rubbish issue'
In that time the charity has grown from small one depot in West London with one van delivering to just a few local organisations, to now, with four depots, two kitchens and over 50 vans in London. Its vision is a London where good food is never wasted, and no one goes hungry. “We aim to reduce the negative impact food waste has on the environment by working with the food industry to rescue high-quality surplus produce that would otherwise have gone to waste. In 2025, thanks to amazing partners like Insight Investment, we had our biggest ever year, rescuing over 18,000 tonnes of edible food and redistributing the equivalent of 44 million meals to over 1,200 community groups and primary schools in every London borough,” said Savage.
Alongside its work with communities across London, The Felix Project is supported by corporate partners who recognise that tackling food waste and food insecurity is a genuine win‑win – protecting the environment while helping people access good food. Insight Investment is one of these vital partners, with a long‑standing commitment to supporting food insecurity charities across the regions where we operate. In London, Insight staff chose The Felix Project as our regional partner as part of a collective desire to provide basic needs support to the communities our colleagues live in. Insight and Felix share a common aim in preventing edible food from going to waste to deliver impact far beyond the food itself. Through fundraising, volunteering and colleague engagement, Insight has been supporting Felix’s mission for nearly three years. Colleagues have given up 410 hours of their time to support projects, and raised £22,300.22 through fundraising events like our annual pub quiz and auction.
Partnership to deliver a shared mission
In 2025 it pioneered several new projects including: Felix Fresh: Pop-up markets designed to help combat seasonal gluts of food during harvest season. The events happen throughout the year across London and enable us to give out up to five tonnes of fresh surplus produce to local communities and support an average of 200 families. Felix Bakes: A small baking kitchen, where an incredible baker takes surplus produce like bananas and carrots and turns them into healthier bakes ready for distribution. Farm Rescue: A programme between August and November that sees volunteers head out to farms in Kent, East Sussex and Milton Keynes, to pick fruit and vegetables. In 2025, more than 2,000 volunteers rescued 320 tonnes of produce. Felix Food Factory: A one-of-a-kind production unit that will be fully operational in 2026. The site will do a whole range of production to help us re-imagine surplus, but at the moment it is focused on decanting large catering packs of items like flour and oats into smaller packets for people in their homes.
The Felix Project is embracing innovation to try and rescue more. From reimagining how to collect and distribute surplus to using food waste in new ways, the charity is rewriting the rule on how to get food where it’s needed most.
Innovation for maximum impact
In London, Felix supplies over 1,200 organisations, of which a huge majority is seeing demand for help rise. Eight in 10 of these organisations also offer additional support services, ranging from childcare, employment and benefit advice, health advice, sports, activities and more. The food Felix provides is often a catalyst – it’s what brings people in and allows them to start benefitting from the other services. Donations from Felix also save these providers money, which can then be invested into other services. “So many organisations would simply not be able to continue without our help, and without the public and incredible corporate support we would not be able not do what we do,” said Savage.
The food-chain reaction
Last year it was announced that The Felix Project would merge with FareShare to become an even bigger and bolder movement, working to tackle food waste across the whole of the UK, not just London. The new charity will run seven depots across the UK, and works with 16 network partners to help deliver food to over 8,000 community organisations. “We want to have greater impact and to drive forward policy changes that will move the needle when it come to the amount of food we rescue. We are excited by the challenge,” said Savage. To succeed, the charity will need over £38 million a year to run. Now more than ever, it will rely on the strength of corporate partners. As The Felix Project and SareShare embarks on this next chapter, the partnership with Insight Investment remains rooted in a shared belief that collaboration can deliver lasting change. As The Felix Project expands its reach across the UK, it looks forward to continuing to work with Insight colleagues and volunteers to ensure good food reaches those who need it, and to seeing the impact of this partnership grow in meaningful ways.
Growing for greater impact
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The food Felix provides is often a catalyst – it’s what brings people in and allows them to start benefitting from the other services.
