S&P: EU insurers step up private credit bets

European Union (EU)-based insurers and reinsurers have increased their exposure to private credit in recent years, reflecting a broader trend toward portfolio diversification and yield enhancement, according to a new insurance brief published by S&P.

In the brief, entitled ‘EU Re/Insurers Eye Private Credit’, S&P said that EU-based re/insurers have increased their allocation to private credit to 5.8% in second-quarter 2025 from 3.9% in fourth-quarter 2016, with life insurers typically investing more in private credit than industry peers. This is not least due to the prevalence of longer-tailed insurance products, such as life savings and retirement.

Certain segments – such as distressed debt, junior securitisation tranches, and leveraged buyout debt funds – may carry higher risks than others. However, re/insurers' relatively low exposure to these segments limits their effect on investment portfolios' risk-return profiles.

“EU-based re/insurers' exposure to illiquid assets is sizable in absolute terms but limited in relative terms. We will continue to monitor their exposure to private credit and its implications for their financial strength and resilience,” S&P Global Ratings credit analyst Volker Kudszus said.

For more information contact S&P.

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