US and European insurers are deepening private credit exposure as appetite for fund finance, infrastructure and asset-based lending continue to grow, according to Moody’s Ratings.
Forty-two per cent of US insurers and 36% of UK and European insurers plan to increase exposure. At year-end 2025, private credit accounted for an estimated 35% of US life insurers’ investments, around 20% in the UK and 11% in Europe.
Moody’s revealed that although exposure remains relatively small in asset-based finance, fund finance, direct lending and private structured credit, it is growing rapidly.
Fund finance is the fastest-growing private credit segment across most markets, while infrastructure and asset-based finance are among the most sought-after areas for future investment.
Moody’s also found that AI-driven demand for data centres and associated energy infrastructure is creating significant investment opportunities, and it estimates the overall US insurance sector has around $15-20bn of exposure to data centres.
Although greater allocations increase illiquidity, valuation and credit risks, Moody's does not expect these trends to materially weaken the creditworthiness of most rated insurers, given current exposure levels and generally strong asset-liability management practices.
