Insurance companies have become among the most consequential new participants in private credit, drawn by a structural alignment that the data bears out. U.S. insurers held $8.98 trillion in total cash and invested assets as of year-end 2024, a 5.3% increase from the prior year, according to the NAIC Capital Markets Bureau’s May 2025 asset-mix report.1 Within that base, Schedule BA assets — the catch-all category that captures alternatives including private credit, infrastructure debt, and other non-traditional instruments — grew 7.8% year over year, faster than the overall investment portfolio, and represented 6.4% of total invested assets.1 The direction of allocation is consistent: insurers are systematically moving toward higher-yielding, less-liquid instruments that better match long-duration annuity liabilities.
The parallel growth in insurer CLO exposure reinforces the pattern. At year-end 2024, U.S. insurers held $276.8 billion in collateralized loan obligations — both broadly syndicated and middle market — representing 5.1% of total bond holdings and 3.1% of total cash and invested assets.2 That figure has more than doubled since 2018 and includes $224.5 billion in broadly syndicated CLOs and $52.3 billion in middle market CLOs.2 Life insurers dominate the exposure, holding 82% of the industry total; insurers with more than $10 billion in assets account for an equivalent 82%.2 Both figures underscore what practitioners observe in deal rooms: insurance capital in private credit is not a cottage industry phenomenon. It is concentrated in the largest, most sophisticated platforms.
The Structural Logic of Permanent Capital
The appeal of private credit to insurance companies is rooted in liability matching rather than yield chasing, even if yield is the proximate motivation. A life insurer writing fixed annuities with decade-long payout schedules needs assets that generate predictable, contractual cash flows over comparable periods. Direct loans to middle market companies, asset-based finance portfolios, and infrastructure debt all fit the profile. Annuity liabilities are among the most stable funding sources in capital markets — they do not redeem quarterly, they do not face LP advisory committee scrutiny, and they do not have a five-year fund clock ticking.
The private credit market as a whole reflects this convergence. Morgan Stanley Investment Management estimated the market at approximately $3 trillion at the start of 2025, growing from roughly $2 trillion in 2020, and projects further expansion to approximately $5 trillion by 2029.3 Insurance-linked capital is a structural contributor to that trajectory rather than a cyclical participant in it.
The Goldman Sachs Asset Management 14th Annual Global Insurance Survey, conducted in early 2025 among 405 chief investment officers and chief financial officers representing more than $14 trillion in insurance balance sheet assets, found that 58% of respondents planned to increase allocations to private credit during the following twelve months.4 More specifically, 40% planned to increase allocations to investment-grade private credit and 36% to asset-based finance.4 The breadth of that intent — across geography, insurer type, and liability profile — reflects a structural commitment, not opportunistic positioning.
The KKR/Global Atlantic Template and Its Proliferation
The model that defined the insurance-private credit convergence is the vertical integration of origination expertise with insurance balance sheet capacity. KKR completed its acquisition of the remaining 37% of Global Atlantic on January 2, 2024, bringing its ownership to 100% and tightening the integration between its alternative asset management platform and the insurer’s annuity balance sheet.5 Global Atlantic’s assets under management had grown to $158 billion from $72 billion in 2020 over the period of KKR’s partnership, illustrating the compound effect of pairing investment-grade origination infrastructure with permanent capital.5
The Apollo/Athene arrangement — in which Apollo Global Management manages assets on behalf of Athene’s retirement services balance sheet — predates the KKR/Global Atlantic deal but follows the same logic. As of December 31, 2024, Apollo reported approximately $751 billion in total assets under management, with Athene representing the retirement services segment through which insurance capital is deployed across credit strategies.6 The partnership structure means that when Apollo originates a private credit asset, Athene’s balance sheet is an available home for it — at the cost of capital that annuity liabilities allow rather than the cost that LP return expectations demand.
This integration model has prompted similar arrangements across the industry. MetLife Investment Management acquired PineBridge Investments in late 2025, and Manulife acquired a 75% stake in Comvest Credit Partners that same year, according to McKinsey’s analysis of 2025 insurance and private credit convergence trends.7
The CLO Market as a Proxy for Insurer Risk Appetite
CLO exposure is the most transparent window into how insurance capital engages with private credit at scale. The NAIC’s April 2026 issue brief on private credit and CLOs confirmed that new CLO issuance hit a record of approximately $200 billion in 2024 — exceeding the prior record of roughly $180 billion set in 2021 — with life insurers holding 82% of industry CLO investments and large life insurers accounting for approximately 73% of the total.2 The credit quality of those holdings has remained relatively stable, with approximately 80% rated investment grade or higher and approximately 39% rated AAA at year-end 2024.2
Private equity-owned insurers — of which there were 137 as of year-end 2024 — held about 21% of total insurer CLO exposure, or approximately $59 billion, but at materially lower average credit quality: roughly 65% investment grade versus 80% for the industry overall, and just 21% rated AAA versus the industry’s 39%.2 Regulators have noted this divergence. The NAIC’s principles-based bond definition, effective January 1, 2025, requires assets to be classified based on economic substance rather than legal form, specifically to prevent highly structured or equity-like instruments from receiving inappropriate bond capital treatment.8 The NAIC has also increased the risk-based capital charge on CLO residual tranches to 45% and is evaluating capital treatment for other asset-backed security exposures.8
What Regulatory Pressure Means for Participants
The NAIC’s regulatory response to insurance capital growth in private credit is measured but directionally significant. State regulators are not treating private credit or CLO allocations as inherently inappropriate — the NAIC’s April 2026 issue brief explicitly says so — but they are updating the tools available to assess whether capital, disclosure, and supervision properly reflect the underlying risk.8 Asset adequacy testing under AG 53 has been strengthened to increase scrutiny of cash-flow testing assumptions for long-duration liabilities. AG 55 addresses the growth of asset-intensive annuity reinsurance through additional disclosure and testing requirements. Beginning with 2026 reporting, insurers must provide more granular disclosures on private placements and other complex instruments, including fair value, Level 2 and Level 3 exposure, payment-in-kind interest, and private letter rating information.8
For market participants, these reforms matter at the margin. The 45% RBC charge on CLO equity tranches effectively prices out insurance capital from the first-loss position in CLO structures — the positions that carry the highest return but also the highest risk. The shift toward investment-grade-rated instruments, which the Goldman Sachs survey data confirms is the dominant insurer preference, is thus reinforced by regulatory incentives as well as liability-matching logic.
Competitive Implications for Specialty Lenders
Understanding where insurance capital has a structural advantage — and where it does not — has become essential for middle market lenders. The Goldman Sachs survey finding that 40% of insurance CIOs plan to increase investment-grade private credit allocations is the clearest signal of where competitive pressure will intensify.4 Investment-grade credits with long, predictable cash flows and asset-based structural protections are precisely the profiles that insurance balance sheets are designed to hold. The McKinsey Global Private Markets Report covering 2025 activity found that insurance and wealth capital accounted for a rising share of private credit inflows, with much of that capital flowing into investment-grade strategies and structures.7
PE-backed direct lenders operating in that segment should expect continued spread compression. The McKinsey data shows global new-issue direct lending median spreads fell to 544 basis points at year-end 2025 from 716 basis points in March 2023 — a multi-year trend in which expanded supply of lower-cost capital plays a role alongside broader competitive dynamics.7 For lenders who cannot match the liability cost of an annuity balance sheet, the logical response is to compete in segments where that cost-of-capital advantage is less determinative: faster approval timelines, higher structural complexity, covenant flexibility, and sector-specific underwriting expertise in areas where insurance committee frameworks are less naturally suited to assess risk.
Asset-based finance represents a more nuanced competitive landscape. The 36% of insurance CIOs planning to increase ABF allocations suggests strong demand, but ABF encompasses an enormous range of strategies — from consumer receivables to infrastructure lending to commercial real estate — with very different underwriting requirements. Specialty lenders with deep vertical expertise in sectors where credit assessment requires operational knowledge that insurance platforms do not typically maintain in-house retain a defensible position.
Conclusion
The insurance capital entering private credit is structural, not cyclical. The NAIC data confirms that U.S. insurers’ Schedule BA assets — the broadest proxy for alternative credit exposure — grew 7.8% in 2024 against a backdrop of rising regulatory scrutiny, suggesting that demand is durable even as the oversight framework tightens.1 The Goldman Sachs survey makes the forward-looking case directly: insurance CIOs representing more than $14 trillion in assets identified private credit as their most in-demand exposure category for the coming year.4 Morgan Stanley’s projection of a $5 trillion private credit market by 2029 would not be achievable without insurance balance sheets as a structural pillar of the capital base.3 The market is evolving in composition as well as size — and participants who understand the structural incentives driving insurance allocation, and the regulatory constraints shaping how that capital is deployed, will be better positioned to navigate what comes next.
Footnotes
- NAIC Capital Markets Bureau, “U.S. Insurance Industry’s Cash and Invested Assets Rise Over 5% to Close in on $9 Trillion as of Year-End 2024,” May 2025 (Total cash and invested assets: $8.98 trillion, YE2024; Schedule BA growth: 7.8% YOY; Schedule BA share: 6.4% of total invested assets.)
- NAIC Capital Markets Bureau, “U.S. Insurers’ Total Collateralized Loan Obligation Investments: Pace of Growth Slows in 2024,” 2025 (Total insurer CLO holdings: $276.8 billion at YE2024; 5.1% of total bonds; 3.1% of total cash and invested assets; ~80% investment grade; ~39% AAA; PE-owned insurers: ~21% of total CLO exposure, ~$59 billion; record CLO issuance: ~$200 billion in 2024.)
- Morgan Stanley Investment Management, “Understanding Private Credit’s Rapid Growth,” October 3, 2025 (Private credit: ~$3 trillion at start of 2025; estimated ~$5 trillion by 2029, per PitchBook as of May 2025.)
- Goldman Sachs Asset Management, “The Great Pivot: 14th Annual Global Insurance Survey,” 2025 (405 CIOs/CFOs; >$14 trillion in combined balance sheet assets; 58% plan to increase private credit allocations; 40% to investment-grade private credit; 36% to asset-based finance.)
- Global Atlantic Financial Group, “KKR Completes Acquisition of Remaining 37% of Global Atlantic,” January 2, 2024 (KKR ownership increased to 100%; Global Atlantic AUM grew to $158 billion from $72 billion in 2020 during KKR partnership.)
- Apollo Global Management, Inc., Q4 and Full Year 2024 Earnings Press Release, February 4, 2025 (Apollo total AUM: approximately $751 billion as of December 31, 2024.)
- McKinsey & Company, “Private credit in 2025: A maturing industry navigates change,” Global Private Markets Report 2026, June 9, 2026 (Insurance and wealth capital: rising share of inflows; ABF fundraising: ~$70 billion in 2025; global new-issue direct lending median spreads: 544 bps at YE2025 vs. 716 bps in March 2023; MetLife/PineBridge and Manulife/Comvest partnerships cited.)
- NAIC Government Affairs, “How State Insurance Regulators are Responding to Growth in CLOs and Private Credit,” April 2026 (Principles-based bond definition: effective January 1, 2025; RBC charge on CLO residual tranches: raised to 45%; AG 53 and AG 55 reforms adopted; enhanced private placement disclosure beginning 2026 reporting.)
