Exploring the Evolving Role of Private Credit in Insurance Capital Markets

In a rapidly changing financial landscape, the intersection of private credit and insurance company capital has garnered significant attention from industry leaders and financial experts. On July 17, 2025, Ryan J. Moreno, Co-Head of DLA Piper’s Leveraged Finance team, and David Ells, Partner and Portfolio Manager at Ares Management, engaged in a detailed discussion on this crucial topic during an episode of LSEG LPC’s Lending Lowdown podcast.

The dialogue centered around the evolving relationship between private credit managers and insurers, emphasizing the innovative investment structures that have emerged. These structures, including rated feeder vehicles, collateralized fund obligations, and separately managed accounts, are designed to enhance capital efficiency while adhering to risk-based capital (RBC) requirements. The recent guidance issued by the National Association of Insurance Commissioners (NAIC) has further influenced this dynamic, providing a regulatory framework that insurers must navigate when deploying capital in private credit funds.

According to Moreno, "Many insurers are increasingly turning to private credit funds as they seek higher and more stable yields in an investment environment that has become increasingly constrained." This shift is indicative of a broader trend where institutional investors are exploring alternative assets to enhance their portfolio returns. David Ells supports this view, stating, "Insurers are strategically allocating long-dated, fixed-rate capital to gain exposure to private credit, allowing them to optimize their overall investment strategies."

The discussion also delved into the structuring and regulatory considerations vital for insurers aiming to access insurance capital at scale. The panel highlighted how asset managers are adapting their strategies to align with insurers' risk-return profiles, enabling them to unlock capital effectively and scale their lending platforms. This adaptability is critical in a market characterized by volatility and uncertainty, where traditional investment vehicles may no longer suffice.

The implications of these developments are far-reaching. As private equity ownership becomes more prevalent, the methodologies for structuring investments are evolving. Industry experts suggest that this trend could lead to more innovative financial products that not only meet regulatory requirements but also cater to the specific needs of institutional investors.

In conclusion, the intersection of private credit and insurance capital represents a significant evolution in the financial services sector. As insurers continue to seek higher yields in a constrained market, understanding the complexities of private credit becomes paramount. The ongoing dialogue between financial institutions, regulatory bodies, and investment managers will undoubtedly shape the future of this landscape, making it essential for stakeholders to remain informed and adaptable. The full discussion can be accessed through the LSEG LPC podcast channel, providing further insights into these pressing financial matters.