U.S. Insurers’ Collateralized Loan Obligation Investments at Year-End 2025
Holdings Decline for the First Time
First Annual Decline
U.S. insurers held $272.8 billion in collateralized loan obligations, or CLOs, at year-end 2025, a 1.5% decrease from 2024. This was the first annual decline since the NAIC began tracking insurers’ CLO exposure.
Exposure and Risk
The NAIC report examines insurers’ investments in broadly syndicated loan CLOs, middle-market CLOs, and commercial real estate CLOs. It also analyzes credit quality, insurer concentration, CLO market activity, and the potential risks state insurance regulators continue to monitor.
What Does the NAIC Report Say About Insurer CLO Investments?
A collateralized loan obligation is an investment backed by a pool of loans made to below-investment grade companies through a syndicate of lenders, with one serving as the lead lender (i.e., broadly syndicated loans) and it may also be, be an investment backed by direct loans made by a bank to small or mid-sized companies (i.e. middle market loans). CLOs divide the payments and risks associated with those loans among different debt and equity layers that comprise their capital structure, known as tranches.
At year-end 2025, U.S. insurers held:
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$272.8 billion Combined broadly syndicated loan and middle-market CLO exposure.
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$65.6 billion Middle-market CLOs, such total CLO exposure was
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$207.2 billion Broadly syndicated loan CLOs
Key Findings About U.S. Insurers’ CLO Investments
Download ReportTotal Insurer CLO Exposure Declined Slightly in 2025
U.S. insurers’ combined broadly syndicated loan and middle-market CLO investments decreased from $276.8 billion in 2024 to $272.8 billion in 2025, a decline of 1.5%. Broadly syndicated loan CLO exposure decreased approximately 2.5% to $207.2 billion, while identified middle-market CLO exposure increased approximately 25% to $65.6 billion. Part of the increase in identified middle-market CLOs resulted from a more detailed process for analyzing insurers’ year-end 2025 investment data, rather than organic investment growth alone.
CLOs Remained a Relatively Small Share of Insurer Investments
At year-end 2025, CLOs represented approximately 4.8% of U.S. insurers’ total bond investments and 2.8% of U.S. insurers’ total cash and invested assets. Both percentages declined slightly from 2024.
Most Insurer CLO Investments Were Higher Quality
Approximately 96% of insurers’ CLO exposure carried NAIC 1 or NAIC 2 Designations at year-end 2025. NAIC 1 investments accounted for 83% of the total. NAIC 1 and NAIC 2 Designations generally correspond to investment-grade credit quality. The concentration in these designations indicates that most insurer CLO exposure remained in higher-credit quality tranches.
Life Insurers Held Most CLO Investments
Life insurers accounted for 81% of total U.S. insurer CLO exposure at year-end 2025. Property and casualty insurers held 17%, while health insurers held the remaining share. CLOs can provide income and long-duration assets that help life insurers match their investments with long-term insurance obligations.
Large Insurers Held Most of the Industry’s CLO Exposure
Insurers with more than $10 billion in assets under management held 83% of the insurance industry’s total CLO exposure at year-end 2025. Ten insurer groups accounted for approximately 42% of all broadly syndicated loan and middle-market CLO investments held by U.S. insurers. These groups included large life insurers and private equity-owned insurers.
Insurer Commercial Real Estate CLO Investments Increased
In addition to the broadly syndicated and middle market CLOs, U.S. insurers held $16.4 billion in commercial real estate CLOs at year-end 2025, a 17% increase from 2024. Life insurers held 91% of insurers’ commercial real estate CLO exposure. Approximately 73% of these investments were rated investment grade or higher. Commercial real estate CLOs are backed by relatively short-term transitional loans on real estate properties.
Why Insurer CLO Investments Matter
Like other investments, CLOs carry risks. The risk of a CLO investment depends on several factors:
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The credit quality of the underlying loans
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The diversification of the loan portfolio
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The protections built into the CLO structure
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The investor’s position within the CLO capital structure
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The experience and performance of the CLO manager
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The insurer’s total concentration in CLOs
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The exposure relative to the insurer’s capital and surplus
How CLO Risk Works
CLOs divide payments and risks among different tranches. Senior, higher-rated tranches receive payments before lower-rated tranches and have greater protection against losses due in part to a higher level of credit enhancement, or more subordination. Lower-rated tranches may provide higher potential returns but carry greater credit risk.
State insurance regulators consider both the characteristics of an insurer’s CLO investments and the size of the exposure relative to the insurer’s overall financial position.
How Do State Insurance Regulators Oversee CLO Investments?
The NAIC's Capital Markets Bureau monitors global capital-market developments and analyzes their potential effect on U.S. insurers’ investment portfolios. This includes analyzing insurer-reported CLO holdings, credit quality, market activity, and exposure concentrations.
Beginning with year-end 2026 annual statement filings, CLOs reported by U.S. insurers in the asset-backed securities section of Schedule D will be subject to modified risk-based capital factors. These factors are intended to better reflect the investments’ underlying credit risk.
The Capital Markets Bureau will continue to monitor insurer CLO investments and broader CLO market trends.
Frequently Asked Questions About CLOs and Insurance
A collateralized loan obligation, or CLO, is an investment backed by a pool of loans, generally loans made to below-investment grade companies by a syndicate of lenders (i.e., broadly syndicated loans) or, in some structures, direct loans to small or mid-size companies by one lender (i.e., middle market loans). Payments from the loans are distributed to investors based on the class or level of CLO tranche they hold. Each tranche has a different level of risk, payment priority, and potential return. Senior tranches generally receive payments first and have more protection against losses due to their higher position in the CLO capital structure. Whereas, lower tranches receive payments after the senior notes and take on more risk due to their subordination in the CLO capital structure.
U.S. insurers held $272.8 billion in broadly syndicated loan and middle-market CLOs at year-end 2025. They also held $16.4 billion in commercial real estate CLOs.
U.S. insurers’ total broadly syndicated loan and middle-market CLO exposure decreased 1.5% in 2025, from $276.8 billion to $272.8 billion. It was the first annual decline since the NAIC began tracking this exposure.
A broadly syndicated loan CLO is backed primarily by loans made to larger companies. These loans are generally arranged by a lead lender, such as a bank or other financial institution, along with additional lenders (i.e., a syndicate), and pieces of the loans are then distributed among multiple investors. U.S. insurers held approximately $207.2 billion in broadly syndicated loan CLOs at year-end 2025.
A middle-market CLO is backed primarily by loans made to small or midsized companies. These loans may be less liquid and may carry more credit risk than broadly syndicated loans as they are directly lent to the company by a lender, and they are not tradeable. U.S. insurers held approximately $65.6 billion in identified middle-market CLOs at year-end 2025. Part of the reported annual increase resulted from improvements in the NAIC’s identification and analysis of insurer investment data.
A commercial real estate CLO is backed by loans associated with commercial properties. The underlying loans often finance properties undergoing operational, financial, or physical changes. U.S. insurers held $16.4 billion in commercial real estate CLOs at year-end 2025, an increase of 17% from the previous year, all of which were investment grade credit quality.
Life insurers held 81% of U.S. insurers’ total BSL and MM CLO exposure at year-end 2025. Property and casualty insurers held 17%, and health insurers held the remaining share.
Approximately 96% of insurers’ BSL and MM CLO exposure carried NAIC 1 or NAIC 2 Designations at year-end 2025. NAIC 1 investments represented 83% of the total. These designations generally correspond to investment-grade credit quality.
The NAIC analyzes insurer financial filings, credit quality, investment concentrations, market trends, and evolving CLO structures. This information helps state insurance regulators identify emerging risks and evaluate whether insurers hold enough capital for their investment exposures.
Download the NAIC CLO Report
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Insurer CLO exposure from 2018 through 2025
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Broadly syndicated loan and middle-market CLO investments
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Insurer CLO holdings by company type and size
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NAIC Designations and credit quality
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Commercial real estate CLO investments
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CLO issuance and outstanding market volume
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CLO spreads and market developments through September 2026
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Regulatory considerations and risk-based capital treatment
Related Resources
Contact the NAIC
Contact the Communications Team for media inquiries or the Capital Markets Bureau for questions about the analysis.