Life insurers warned about systemic risk from increase in private credit investments

Written by Adam Cadle

17/10/2023

US private equity investor, J. Christopher Flowers, is warning life insurers that the dramatic increase in their private credit investments may create systemic risk for investors.

In an interview with the Financial Times, Flowers said that investors could be underestimating the risks that come from a large amount of money going into private credit loans, with insurers hoping for higher investment.

“Too many people have piled into private credit and it has a special feature that a chunk of it is funded with life insurance assets. One of these days, some life insurance company is going to get whacked on their private credit…You can have a run on a life insurance company.”

Flowers runs J.C. Flowers & Co., a private equity investment firm, and was previously a Goldman Sachs, a multinational investment bank and financial services company, partner.

Related Articles