Life Insurers’ Private Credit Investments and Annuity Market Share Capture

Ralf R. Meisenzahl, Jackson Overpeck and Andy Polacek

No WP 2025-09, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: We show that life insurers have increased their lending in the private placement market over the past decade, totaling $849 billion, or 14%, on life insurers’ balance sheets in 2024. A substantial part of the growth stems from private credit extension to financial borrowers and to privately placed asset-backed securities. We document that private equity-owned (PE-owned) life insurers drive these trends. We also provide evidence that these investments have about 80 basis points higher spreads compared to public bonds and foster PE-owned insurers’ growth in the annuities market. A one standard deviation increase in financial private placement investments is associated with 0.05 percentage points higher market share in the annuities market.

Keywords: private credit; private placements; Annuities; Private equity (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Pages: 49
Date: 2025-06-30
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.21033/wp-2025-09 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedhwp:101280

Ordering information: This working paper can be ordered from

DOI: 10.21033/wp-2025-09

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of Chicago Contact information at EDIRC.
Bibliographic data for series maintained by Lauren Wiese ().