Private Credit and Insurance: A Data-Driven View from State Regulators
Inside Insurers’ Private Credit
Private Credit by the Numbers: How Much Do U.S. Insurers Hold?
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$1.21 trillion Total insurer holdings under a broad definition of private credit, approximately 13% of cash and invested assets.
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$544 billion Holdings in privately rated bonds, business development companies, and private credit funds.
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$666 billion Holdings in private placement bonds, bank loans, and middle-market CLOs.
About the NAIC Private Credit Analysis
Because there is no standard definition of private credit, a single headline number can obscure important differences. Prepared by the NAIC’s Capital Markets Bureau, Private Credit Analysis of the U.S. Insurance Industry draws on year-end 2025 insurer investment data to identify and categorize insurers’ holdings across distinct private credit categories, clarifying where additional risk and complexity may reside. The analysis supports state insurance regulators’ oversight and gives policymakers and the public a clearer picture of this evolving market.
Key Findings on U.S. Insurers’ Private Credit Exposure
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Privately rated bonds make up most of the focus area Insurers held approximately $512 billion in privately rated bonds and approximately $32 billion in BDCs and private credit funds at year-end 2025.
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Regulators are tracking early warning signs Non-accruals for private credit lending were below their 10-year average as of the third quarter of 2025. At the same time, the use of payment-in-kind features rose to about 7%, above the decade average of about 6%, and a record 40% of 2025 default actions came from borrowers that had defaulted before.
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The market has not yet been tested by a severe downturn Much of private credit’s rapid growth occurred during a period of abundant capital, strong economic conditions, and relatively low default rates. How more complex private credit investments will perform in a prolonged downturn remains uncertain.
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State regulators are strengthening the data State insurance regulators adopted enhanced reporting disclosures in 2026 that will be included in year-end 2026 annual statement filings, giving regulators more detail to identify and classify private credit exposures.
Why Private Credit Oversight Matters
Insurers invest the premiums policyholders pay so they can keep their promises when claims come due, sometimes decades later. Private credit can help diversify investment portfolios and match long-term obligations, but some investments may be harder to value, less liquid, or less transparent than public bonds.
Clear, consistent data helps regulators, policymakers, and the public better understand where complexity exists and supports confidence that insurers can meet their obligations to policyholders.
“State regulators are continuing to evolve regulatory frameworks alongside insurers’ changing investment strategies, ownership structures, and risk-transfer arrangements. This report is a prime example of how the NAIC provides state insurance regulators with the information and tools needed to increase our oversight of increasingly complex investments and asset structures.” — Virginia Insurance Commissioner and NAIC President Scott White
Strengthening Regulatory Oversight
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Strengthening financial reporting and transparency for private placements and complex investments.
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Refining risk-based capital so requirements better reflect investment risk.
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Enhancing asset adequacy and liquidity stress testing.
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Increasing scrutiny of credit ratings, both public and private.
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Reviewing asset-intensive reinsurance arrangements.
Frequently Asked Questions
Private credit refers to debt or debt-like investments that are not publicly issued or traded. Because these investments generally lack a secondary market, investors typically receive higher yields in exchange for the added risk. Private credit can include private placement bonds, direct lending, privately rated bonds, middle-market collateralized loan obligations (CLOs), business development companies (BDCs), and private credit funds. U.S. insurers began lending directly to companies in the 1980s, and over time the market has expanded to include a broader range of asset types and more complex structures.
As of year-end 2025, U.S. insurers held approximately $1.21 trillion in private credit under a broad definition, about 13% of their cash and invested assets. Of that amount, approximately $544 billion, about 6% of cash and invested assets and 9% of total bond holdings, is in privately rated bonds, business development companies (BDCs), and private credit funds, the categories that are the NAIC’s primary focus.
The NAIC focuses on the approximately $544 billion that insurers held in privately rated bonds, BDCs, and private credit funds at year-end 2025 because not all private credit has the same characteristics. Private placement bonds, bank loans, and middle-market CLOs, which make up more than half of insurers’ broadly defined holdings, generally have more straightforward credit risks and structures. Insurers have invested in them for decades, and regulators have a long history of monitoring them. Privately rated bonds, BDCs, and private credit funds may introduce additional risks through greater structural complexity and/or underlying exposure to alternative assets. Distinguishing between the two gives regulators and the public a clearer view of where closer attention is warranted.
There is no standard definition of private credit, and market participants often include different types of assets when they measure it. Many published estimates that measure the entire private credit market include asset classes that the NAIC does not classify as private credit investments. So total market figures should not be compared directly with the NAIC’s estimates of insurers’ holdings.
The figures in this report are best estimates based on insurers’ current reporting requirements and available data. Enhanced reporting disclosures adopted in 2026 will be included in year-end 2026 annual statement filings. These disclosures are expected to improve how private credit exposures are identified and classified, which may refine future analyses.
State insurance regulators oversee insurers’ investments, including private credit. Working together through the NAIC, which is governed by the chief insurance regulators of the 50 states, the District of Columbia, and five U.S. territories, state regulators are strengthening financial reporting and transparency for private placements and complex investments, refining risk-based capital so requirements better reflect investment risk, enhancing asset adequacy and liquidity stress testing, increasing scrutiny of both public and private credit ratings, and reviewing asset-intensive reinsurance arrangements.
Related Resources
Media Inquiries
Reporters with questions about this analysis should reach out to the NAIC Communications Team.