Three-quarters of insurers plan to increase private markets allocations
Approximately 75% of insurers plan to increase their allocations to private markets over the next 12 months, despite rising government bond yields and growing scrutiny of private credit markets, according to a BlackRock survey reported by the Financial Times.
A recent BlackRock survey reveals that three-quarters of insurers intend to boost their investments in private markets over the next year, despite increasing government bond yields and heightened scrutiny of private credit markets, according to the Financial Times. The survey, encompassing insurance firms overseeing over $24tn in assets, indicates a persistent appetite for private investments, although the proportion planning to expand allocations has dropped from 94% last year.
Private credit is of particular interest, with 41% of respondents favoring heightened exposure to private debt compared to other private asset classes, such as buyouts. Mark Erickson, BlackRock's global insurance strategist, notes that a surge in defaults and subpar recovery rates could potentially temper future allocations. However, the survey suggests that insurers have not yet substantially reduced their private markets investment strategies.
Private credit continues to be a key focus, with 41% of respondents concentrating on increasing exposure to private debt. US insurance regulators have introduced new capital requirements for certain collateralized loan obligation holdings in July and have intensified scrutiny of private credit ratings utilized to determine insurers' capital requirements.
The relative appeal of private debt has been undermined by the rise in public fixed income market yields, with US 10-year Treasury yields climbing from 4.18% at the start of 2026 to 4.96%, while investment-grade corporate debt yields have reached 5.84%.
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