US life insurer investment portfolios to remain broadly stable in 2026

Written by Adam Cadle

07/01/2026

US life insurer investment portfolios are expected to remain broadly stable in 2026, Fitch Ratings has said, with solid credit quality and core fixed income dominant amid a continued tilt towards private credit and alternative investments, driven by opportunistic repositioning and regulatory reclassifications.

Fitch stated that the persistent search for yield will continue to drive expansion in private credit across multiple asset classes in 2026, often leveraging the origination platforms of affiliated alternative investment managers. Focus will continue on direct lending, CLOs, private ABS, and private label RMBS, positioning insurers to capture incremental spread while managing duration and liquidity considerations.

“We expect investment risk for the industry to increase modestly in 2026, but increased allocations to private credit and level III assets are not expected to result in widespread rating pressure. Schedule BA assets will also continue to increase, driven by NAIC accounting changes that reclassify certain limited partnership and private fund interests from Schedule D to Schedule BA,” Fitch added.

Fixed income assets continued to comprise approximately two-thirds of invested assets at 67% at YE 2024, with corporate bonds maintaining the highest allocation at 41% of invested assets.

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