Private Credit Growth is Largely Driven by Life Insurers; Demotech-Rated Companies Have Limited Exposure

COLUMBUS, Ohio, Aug. 13, 2026 /PRNewswire/ -- Publicly available annual statement data reveals that the Insurance Industry's allocation of cash and invested assets to private credit continues to grow. Private credit, or private debt, is generally defined as a class of less liquid assets that encompasses direct lending, leveraged loans, and private placements. Exposure to these investments can be crudely observed through Schedule D and Schedule BA of NAIC annual statements. In recent years, regulators, rating agencies, insurers, and the public have increased their scrutiny for these investments because of concerns that rapid growth in the class may reduce transparency and pose liquidity risks.

Much of this scrutiny has centered on the Life Insurance Industry, as large annuity writers, especially those that are owned by private equity asset management companies, have invested heavily in private credit. These companies are also more likely to use complex offshore reinsurance arrangements that may further obfuscate underlying asset risk.

P&C and Health insurers have also increased their private credit allocations, but much of this has come from more liquid SEC 144A bonds and/or is more likely to be investment grade rated. As Demotech, Inc. rates predominantly P&C and Title companies, it follows that private credit is generally less of a concern for its Financial Stability Ratings®.

Demotech proudly rates a small selection of life insurance companies. For these companies, which tend to be smaller and well capitalized, private credit is closely monitored by qualified analysts.

About Demotech, Inc.
Established in 1985, Demotech, Inc. is a financial analysis firm located in Columbus, Ohio. Demotech has served the insurance industry by providing objective and independent Financial Stability Ratings^® (FSRs) for Property & Casualty insurance companies, Life & Health insurance companies, and Title underwriters, among others. As the first company to have its rating process formally reviewed and accepted by Fannie Mae, Freddie Mac, and HUD, Demotech has been leveling the playing field by offering FSRs to insurers of all sizes. As of July 11, 2022, Demotech is registered with the U.S. Securities and Exchange Commission as a nationally recognized statistical rating organization (NRSRO) in the class of ratings for insurance companies.

The latest FSRs of all entities reviewed and rated by Demotech, Inc. can be found at www.demotech.com. Information on the procedures and methodologies we utilized to determine and assign ratings can be found at https://www.demotech.com/wp-content/uploads/Ex2.pdf. 

SOURCE Demotech, Inc.