Private credit climbs 6 percent for US life insurers
American life insurers and annuity providers raised their private credit investments by 6 percent last year as alternative lenders expanded operations into commercial finance markets. Asset management companies and private equity groups acquired insurance carriers or bought minority stakes to access stable capital sources and manage investment portfolios. Private placement bonds climbed 6.3 percent to nearly 1.8 trillion dollars and represented more than 45 percent of industry bond portfolios by 2024. Securities rated below investment grade made up 54.7 percent of bank loans without private letter ratings, while 70 percent of rated loans qualified as investment grade.
Annuity sales reached 119.5 billion dollars through the second quarter of 2025, with LIMRA forecasting annual totals above 400 billion dollars for the full year. Fixed indexed products generated 32.8 billion dollars in sales from April through June, while registered index-linked annuities set records at 19.1 billion dollars for the same period. Structured securities beyond mortgage-backed instruments grew at 13 percent annually over ten years and accounted for 28 percent of private credit allocations compared with 17 percent a decade earlier. Direct corporate lending obligations dropped below 60 percent of private credit positions after holding nearly 80 percent of allocations in 2014.
