APAC insurers’ private credit exposure is manageable but growing, Fitch Ratings has stated.
Allocations generally remained below 5% of total assets or broadly within 10% of equity capital, including contractual service margin, in 2025, despite rising over the past two to three years.
Fitch said it believes APAC insurers are generally managing private credit risk through prudent risk controls. These include diversification across managers, borrowers, sectors and geographies; conservative sector selection; limits on leverage; and alignment with long-duration liabilities. Insurers also tend to favour senior secured or senior asset-backed lending strategies.
“Ongoing monitoring of valuations, credit migration, defaults, covenant changes and recoveries remains important in light of the asset class’s illiquid and less transparent nature,” it added.
Regulatory and accounting developments have also supported insurers’ interest in private credit.
