insurers increase private credit allocations to enhance portfolio diversification and returns

Insurers in North America are increasingly allocating their investments to private credit markets, specifically private debt.

Main Motivations

The main motivations behind this shift are diversification, lower volatility, the opportunity to invest in new asset classes, income enhancement, and meeting portfolio climate targets.

Benefits of Private Assets

Insurers are selecting private asset classes that align with their liabilities and improve overall investment performance. Private assets provide access to unique opportunities not readily available in public markets and help mitigate portfolio volatility.

Partnerships with Alternative Investment Managers

Partnerships between insurers and alternative investment managers are on the rise, allowing insurers to tap into specialized expertise and innovative strategies.

Regulatory Landscape

The evolving regulatory landscape also plays a crucial role in compliance and risk management.

Global Trend

The findings from BlackRock's survey highlight the global nature of this trend, with respondents from various regions indicating a collective movement towards private market investments.

Reshaping the Investment Landscape

As insurers continue to navigate the financial markets, their strategic focus on private credit and other private market assets is likely to reshape the investment landscape.

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