A recent survey of global insurers, commissioned by Goldman Sachs and reported by Fairfax media, found that a majority expect credit spreads to widen, company defaults to increase, and the flagship US S&P 500 index to decline this year.

10 Australian insurers were also surveyed, and 50% of them said they would increase their allocations to hedge funds this year, followed by US investment-grade corporate debt and infrastructure debt. Despite this, bearish sentiment was reportedly highest in the Asia-Pacific region.

Participants weren’t named, but Insurance Australia Group Ltd (ASX: IAG) and QBE Insurance Group Ltd (ASX: QBE) were likely among them, given that both companies have multi-billion dollar investment portfolios.

Insurers are among the most conservative investors because their continuously changing risk environment and the inherent uncertainty of the business means that market declines can have big follow-on impacts. Consequently, despite having billions of dollars in assets above what is required for claim expenses, both IAG and QBE remain heavily invested in fixed interest assets, not shares.

As a result, the returns on their investment portfolios are often sub-par. Individual investors don’t suffer from that disadvantage however, and can in fact benefit from market declines if they have the patience and foresight to buy in as the market dips.

The magic of compounding earnings combined with a lower buy price can be great for your portfolio, which is why it’s almost always better to top-up your holdings rather than sell when the market is falling. Three of my favourite shares to buy in a falling market would be Cochlear Limited (ASX: COH), Sirtex Medical Limited (ASX: SRX), and Retail Food Group Limited (ASX: RFG).

All three were sold off heavily amidst the general bearishness back in January and February, yet demand for their products will likely remain largely unaffected by weakness in the share market. Further, Sirtex and Cochlear can invest in themselves to generate growth through new products without having to make major acquisitions or take on much debt.

Surviving a falling market involves much more than just buying the right stocks, however. That's why The Motley Fool's analysts got together to pool their wisdom and answer the age-old question: Is a share-market crash coming?

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Motley Fool contributor Sean O'Neill owns shares of Retail Food Group Limited and Sirtex Medical Limited. The Motley Fool Australia owns shares of Retail Food Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.