Private assets boost life insurers’ returns but heighten risks

Private credit, including private placements, mortgage loans, asset-backed finance, and niche strategies such as litigation finance or infrastructure, has expanded as insurers seek diversification beyond public markets. These investments align with long-duration liabilities like life insurance and annuity products, offering yield premiums above public bonds. However, their complexity and opacity can complicate liability matching, valuation, and regulatory reporting.

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