Working Paper

Life Insurers’ Private Credit Investments and Annuity Market Share Capture

Abstract: We show that life insurers have increased their lending in the private placement market over the past decade, totaling $849 billion, or 14%, on life insurers’ balance sheets in 2024. A substantial part of the growth stems from private credit extension to financial borrowers and to privately placed asset-backed securities. We document that private equity-owned (PE-owned) life insurers drive these trends. We also provide evidence that these investments have about 80 basis points higher spreads compared to public bonds and foster PE-owned insurers’ growth in the annuities market. A one standard deviation increase in financial private placement investments is associated with 0.05 percentage points higher market share in the annuities market.

JEL Classification: G21;

https://doi.org/10.21033/wp-2025-09

Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Working Paper Series

Publication Date: 2025-06-30

Number: WP 2025-09