Insurers across the U.S. and Europe are accelerating allocations to private credit, creating a deepening pool of capital for managers across the asset class, according to new reports from Moody’s Ratings. The shift reflects insurers’ search for yield, diversification, and better capital efficiency amid continued regulatory support for private credit allocations. 

In Europe, private credit holdings grew by approximately 4% in 2024, bringing industry-wide exposure to around €500 billion — representing 13% of total insurance investment portfolios. Allocations are particularly elevated in the UK, where insurers average 18% exposure, with certain balance sheets running as high as 45%. 

The pace of expansion in the U.S. is even more pronounced. U.S. life insurers have now allocated roughly one-third of the sector’s $6 trillion in total assets to private credit strategies. These allocations span a range of structures, including private placements, direct lending, asset-based finance, and structured credit. 

Moody’s survey data points to sustained long-term appetite: approximately 80% of insurers reported plans to increase private credit exposure across at least one sub-sector, with the strongest demand focused on higher-spread asset-based finance and private placements — areas where insurers see strong risk-adjusted return potential under Solvency frameworks. 

“We expect insurers with comparatively low exposure, including some large European groups, to increase their allocations the most,” said Will Keen-Tomlinson, lead author of the European report. “For most insurers, the benefits of investing in private credit assets will outweigh the risks.” 

The continued rotation into private credit positions insurance companies as a growing anchor client base for private credit managers across both public and private platforms — particularly as insurers seek long-dated, capital-efficient private assets that match liability structures and deliver stable income through varying economic cycles.