Insurers are planning to raise their allocations to private markets over the next year, despite a sell-off in government bonds that has pushed yields to multi-decade highs. About three-quarters of insurers surveyed by Black Rock—which polled insurance companies managing over $24tn in assets—plan to increase private asset holdings. The share fell from 94% in last year’s poll but still signals strong institutional demand for private markets.
"It’s gone from very hot, to now still hot, but not moderating or cooling," said Mark Erickson, global insurance strategist at Black Rock. Insurers remained especially bullish on private credit, with 41% indicating plans to boost private debt allocations more than other private assets like corporate buyouts.
The optimism persists even as retail-focused private credit funds face redemptions and concerns grow over troubled loans held by large private debt investors. A modest rise in defaults was expected after years of cheap borrowing, though Erickson noted a sharp increase would signal broader economic stress.
Meanwhile, yields on publicly traded debt have grown more attractive, with the US 10-year yield rising from 4.18% to 4.96% and high-grade corporate debt yields climbing to 5.84%. Still, insurers’ main concern with private debt exposure remains regulatory and capital treatment, not market strain.
Source: Financial Times Companies · Summarized by HeadlinesBriefing