Global insurers’ demand for private credit remains strong but increasingly selective, Marsh’s 2026 Global Insurance Investments Survey has revealed.
Insurer’s private credit appetite is more focused on the rapidly expanding, investment-grade segment of the market. Insurers are particularly interested in allocating to investment-grade direct lending and private placements (40%) and investment-grade structured credit, asset-based finance, net asset value (NAV) lending, and fund finance (38%).
Overall, more than half (57%) of the insurers surveyed plan to increase their exposure to private credit in the next 12 to 24 months, making it the leading area of planned investment growth, ahead of public investment-grade fixed income, which was cited by 48% of insurers. This is in sharp contrast to the Mercer and Oliver Wyman 2024 Global Insurance Investments Survey, when 37% and 32% of insurers planned to increase allocations to fixed income and private credit, respectively.
"Private credit is a compelling opportunity for insurers, especially in the asset-backed space. Insurers can diversify away from corporate risk while realising meaningful yield pickup over similar rated, investment-grade public market bonds," said David Morrow, Mercer's global insurance proposition leader.
Appetite for private credit remains particularly strong in North America. In the US, 65% of insurers surveyed plan to increase allocations, while Canada shows stronger demand, with 74% of respondents planning to increase allocations. Only about half of insurers based in Europe (51%) and the UK (46%) plan to increase allocations.
Interest in private credit is more pronounced at the larger end of the market, with 81% of insurers with more than $25bn in assets planning to increase allocations compared with 46% of those with less than $25bn. Life insurers (73%) were more likely to allocate than Health (56%) and P&C (40%).
The most cited concerns with private credit are a reduction in illiquidity premium and tighter spreads (66%), signalling that investors want to ensure they are being adequately compensated for private credit's liquidity constraints. The other most cited areas of caution include deteriorating underwriting standards or covenants (54%) and rising defaults, spreads, or payment-in-kind (PIK) structures (51%), which would point to borrower distress or deteriorating lending standards as the market matures.
"Capitalising on the benefits of private credit will require insurers to have a rigorous process for manager selection. It will be important for them to choose managers who demonstrate sourcing, underwriting, portfolio construction and workout capability to navigate the next phase of the credit cycle," said Amit Popat, Mercer's global head of financial institutions.
The survey shows a clear gap between insurers' interest in private markets and their readiness to act on opportunities. Only 30% of respondents report having "most" of the private markets capabilities they need to invest with confidence, while 29% have only "some" of the capabilities needed.
On the subject of AI, more than half of insurers (54%) said they are not using AI in a meaningful way. Fewer than a third (29%) use it to analyse alternative investment data and research. The most immediate AI applications in investment teams are data integration, scenario generation, document review, manager monitoring, and risk analysis.
The 2026 Global Insurance Investment Survey was conducted between March and April 2026. The survey includes the views of 123 insurers from 24 countries with over US$4trn in total investment assets.
