Insurance companies expected to deepen ties with private credit – Moody’s Ratings

Written by Adam Cadle

22/01/2025

Insurance companies are expected to deepen their ties with private credit, Moody’s Ratings has said.

In its 2025 private credit outlook, Moody’s Ratings said insurers are shifting their investment portfolios from public investment-grade assets to investment-grade private asset-backed finance (ABF) assets to enhance portfolio returns.

Many insurers are partnering with private credit managers who have greater expertise in this area, allowing them to leverage direct access to asset originator platforms, reduce costs, and improve yield generation.

US life insurance companies are increasing their exposure to private credit through new business flows, investment portfolio repositionings, and affiliations with alternative asset managers, who are investing heavily in the insurance sector.

“We expect the synergy between insurance companies and alternative asset managers to only strengthen, propelled by the growing use of asset origination platforms to generate assets,” said Manoj Jethani, a vice president, with Moody’s Ratings.

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