Former Apollo chief risk officer Chak Raghunathan cautions that many of the Wall Street‑backed insurers emerging over the last decade may falter when a downturn hits. Raghunathan, who helped build Apollo’s insurance arm, now called Athene, warned that the heavy reliance on private credit and aggressive savings products creates liquidity gaps that could trigger mass withdrawals.

The model hinges on pairing illiquid, high‑yield debt with long‑term annuity contracts. Raghunathan argues that if policyholders pull out sooner, insurers may be forced to liquidate assets in a falling market, eroding returns. The warning echoes concerns from Agam Capital founder Avi Katz, who notes that the growing share of private credit in underwriting exposes firms to sharper risk.

Agam Capital, founded in 2016, has advised insurers such as 26North, Guardian Life and Prismic on asset‑liability matching. Last week the firm partnered with 1823 Partners to extend services beyond the U.S., targeting Japan where regulatory shifts threaten private‑credit‑heavy products. Bhalla, former insurance executive, warned that aggressive product designs dilute surrender protections, making withdrawals easier.

Regulators worldwide are tightening scrutiny of private‑equity‑backed insurers, while investors weigh the liquidity risk that could unravel the decade‑long trend of asset‑manager‑owned policies. If withdrawals surge, firms like Athene may face capital shortfalls, forcing costly asset sales. The sector’s future hinges on whether these insurers can align risk profiles with realistic policyholder behavior.