North American insurers warned about increasing private credit allocations

Written by Adam Cadle

14/10/2025

North American insurers have been warned about the potential risks of increasingly investing in private credit markets by S&P Global Ratings.

While these investments can potentially offer higher returns, the ratings agency has warned that the lack of transparency and liquidity in these markets may pose significant challenges for the insurance industry.

“This growth comes with additional risks, primarily illiquidity and complexity, requiring insurers to more actively manage their liquidity profiles, hold more capital, tighten asset-liability matching, and maintain robust risk management programs,” S&P Global Ratings said.

“S&P Global Ratings continuously incorporates and monitors these added risks, and the measures insurers take to counter them, as part of its rating process.”

The 13.8% of corporate bonds (roughly $312bn) held by life insurers that are privately placed, and carry NAIC designations assigned by the SVO, are traditional private placements to investment-grade borrowers. The same goes for the 2.2% of SVO-assigned corporate bonds (about $12bn) held by P/C insurers.

The private credit portion of bonds is made up of 9.6% of private-placed, privately rated corporate bonds ($218bn) and 14.8% of NMSF bonds ($71bn) held by life insurers, as well as 2.6% of corporate bonds ($14bn) and 2.3% of NMSF bonds ($2.5bn) held by P&C insurers.

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