Private Credit+ is a $45tn (£34.2tn) total addressable market opportunity, and insurers are leaning into it with increasing conviction. As insurers expand their allocations and diversify their exposure beyond traditional direct lending into structured products, real-assets finance, and asset-based finance, Kanav Kalia, managing director at Oxane Partners reflects on why insurers need a robust technology infrastructure to achieve data transparency, unified risk frameworks, and operational readiness to manage these exposures.
Private credit has expanded far beyond corporate direct lending into a much broader opportunity set, and this now covers multiple asset classes such as asset-based finance, direct lending, commercial real estate finance, infrastructure finance, fund finance and securitised products. We are calling it Private Credit+. Private Credit+ allocations have transformed from being a niche strategy to a core element for insurers’ investment portfolios globally. At the end of 2024, as much as a third of the $6tn of cash and invested assets held by US life insurers was allocated to various types of Private Credit+ investments according to Moody’s. This isn’t just a US story either, and even though exposure in Europe is lower at about €500bn ($578bn), cumulative growth on the continent over the past five years is close to 30 per cent.
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This expansion shows no signs of slowing. A recent Goldman Sachs survey of 405 insurance CIOs and CFOs representing $14tn in assets under management – approximately 50 per cent of global insurance assets – found that 62 per cent plan to increase allocations to private markets in 2025. Of this majority, over half (58 per cent) are specifically targeting Private Credit+, the highest percentage among all asset classes. Research from Oliver Wyman shows that insurer-funded Private Credit+ assets at the top seven listed private market players now account for 43 per cent of credit assets held by these firms, up from 32 per cent at the end of 2021. The numbers are staggering, but beyond the scale of this shift lie two equally important questions: where exactly is this capital going and do insurers have the infrastructure to manage it effectively?
Insurers’ focus on Private Credit+
With the growth in Private Credit+ allocations, insurers are broadening the range of asset classes beyond traditional public bonds and equities. Insurance firms are not simply pouring capital into corporate direct lending but are strategically targeting specific asset classes with distinct risk-return profiles. These moves are aimed at optimising regulatory capital efficiency, yield enhancement, and liability matching.
Several key areas of focus within Private Credit+ have emerged for insurance firms. These include private asset-backed securities, private placements, commercial real estate debt and asset-based finance in addition to traditional corporate direct lending. This diversification creates opportunity but also adds complexity. As allocations scale and strategies diversify, the operational challenges intensify. Insurers need infrastructure that can aggregate, monitor, and stress-test exposures across increasingly heterogeneous portfolios.
Preparing for the complexities of managing Private Credit+ allocations
The sheer scale of allocations being made means insurers are growing exposure to illiquid, complex assets that require fundamentally different monitoring approaches. As insurers are scaling their Private Credit+ exposure, recent bankruptcies and sector-specific defaults have highlighted the need to manage and monitor these exposures in a changing credit cycle. They must not only understand their growing risk profile but also the interconnections: which sectors, geographies, and sponsor relationships dominate their exposure, and where hidden correlations might emerge.
This demands the ability to analyse both aggregate and loan-level exposures across several dimensions – borrower, sector, collateral, geography, ratings and more. Having the right data foundation is crucial to this. This level of analysis requires transparency into underlying loans to identify cross-collateralisation and understand risk concentration. That transparency must extend to valuations. Insurers need the capability to independently model underlying cash flows, stress-test portfolios as market conditions shift, and update valuations to reflect current risk exposure. This creates the foundation for proactive risk management.
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The next market downturn will test not just investment strategies but operational readiness as well. Insurers need the ability to manage, measure, and mitigate risk in real time, to analyse portfolios proactively for adverse scenarios, and to make informed decisions when markets are moving quickly. Insurance firms need integrated solutions that deliver transparency and enable proactive risk management. They also need to understand public and private exposure simultaneously, given their scale of investment across both these markets.
Looking ahead
The sheer amount of allocations, and their momentum, make the direction of travel clear. Insurers are clearly leaning into Private Credit+ in a significant way; the asset class mix will continue expanding as insurers move beyond traditional corporate direct lending into other strategies to meet yield requirements, liability matching needs, and regulatory capital optimisation.
In this environment, competitive advantage will accrue to insurers who build the technology infrastructure for both opportunity and turbulence. Firms will distinguish themselves not just by allocation size but by operational excellence – the capability to identify risks early, act decisively during dislocations, and maintain underwriting discipline when competition intensifies. Success will depend on how effectively they integrate, manage, and govern their portfolios across public and private exposures – leveraging unified data architectures, sophisticated cross-asset analytics, real-time monitoring capabilities, and governance structures designed for complexity and speed.
This makes it imperative for insurers increasing their exposure to Private Credit+ to ensure they do so with full visibility of their risks. It is about ensuring the underlying technology infrastructure is built for the scale and complexity of the full spectrum of Private Credit+ assets. The opportunity is substantial – Private Credit+ offers genuine diversification benefits, attractive risk-adjusted returns, and structural advantages for patient capital. But insurers need to build the foundational capabilities to capture them sustainably.
