Insurers should consider Bitcoin’s role in investment portfolios – Cartwright

Investment consultancy Cartwright has urged insurers to reconsider the value of including popular cryptocurrency Bitcoin in their strategic investment portfolios. 

The firm noted that a “small allocation to Bitcoin” could offer insurers positive opportunities for risk-adjusted returns and diversified exposures, given it’s low correlation to traditional markets. 

Bitcoin is a digital, decentralised cryptocurrency that can be traded between individuals without the central authority of a bank or government. A single Bitcoin is currently, as of today (20 May 2025), worth £78,791 – having risen from a 2020 price of under £10,000.

Arash Nasri, head of corporate treasury at Cartwright, explained: “Insurers are under increasing pressure to generate returns in a high inflation and uncertain economic environment, while maintaining rigorous liability matching and regulatory capital requirements.” 

Unconventional strategy?

Nasri continued: ”Although Bitcoin may still feel unconventional to some, its characteristics as a finite, decentralised, high liquid asset with low correlation to traditional markets make it increasingly difficult to disregard.

“Despite the penal capital requirements, for the right portfolio even a small allocation – typically in the region of between 2% and 5% – can materially improve diversification and long-term return potential, without undermining portfolio strategy.” 

As well as these benefits, Nasri added that, in a suitable portfolio, Bitcon can offer insurers “a credible inflation hedge”, especially given that 40% of all US dollars, for example, have been created in the last five years. 

He added: “It’s not about speculation – it’s about informed, strategic asset selection. Bitcoin now deserves a seat at the table in institutional investment discussions.”