Insurers Boost Private Credit Allocations Amid Selective Appetite and Capability Gaps
Event summary
- 57% of insurers plan to increase private credit exposure in the next 12-24 months, up from 32% in 2024.
- Investment-grade direct lending and structured credit are top targets for allocation growth.
- Only 30% of insurers report having most of the private markets capabilities needed to invest confidently.
- 75% of insurers managing over $100bn use AI meaningfully, compared to just 10% of those under $1bn.
The big picture
Insurers are increasingly turning to private credit for yield enhancement and diversification, particularly in the investment-grade segment. This shift comes amid growing awareness of liquidity risks and underwriting standards deterioration. The capability gap between interest in private markets and actual readiness to invest highlights potential bottlenecks in allocation growth.
What we're watching
- Regional Disparities
- Whether North American insurers can sustain higher private credit allocations compared to European counterparts.
- Capability Gaps
- How insurers will address their private markets capability shortages through partnerships or internal development.
- AI Adoption
- The pace at which smaller insurers integrate AI into investment operations to compete with larger peers.
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