More than half of surveyed insurers plan to increase their exposure to private credit over the next 12 to 24 months, outpacing investment-grade public fixed income, which was cited by 48% of participants. These findings from the 2026 Global Insurance Asset Survey by Mercer (a business of Marsh) confirm that insurer demand for private credit remains robust. Indeed, the 2026 results contrast significantly with the 2024 survey, when 37% and 32% of insurers planned to increase their allocations to fixed income and private credit, respectively.
However, the study reflects that while demand remains strong, insurers are becoming increasingly selective. Within private credit, allocation priorities are focused on direct lending, investment-grade private placements, investment-grade structured credit, asset-backed finance, net asset value (NAV) lending, and fund finance.
“Private credit represents an attractive opportunity for insurers, particularly in the asset-backed space. It allows for the diversification of corporate risk and access to higher yields compared to similarly rated public investment-grade bonds,” says David Morrow, Global Insurance Proposition Leader at Mercer.
The study indicates that appetite for private credit is particularly strong in North America. In the United States, 65% of respondents plan to increase their allocations, a figure that rises to 74% in Canada. In contrast, only half of European insurers plan to increase their exposure, dropping to 46% in the United Kingdom.
Interest is most pronounced among larger insurers: 81% of those managing over $25 billion plan to increase their exposure, compared to 46% of entities with assets below that threshold. By segment, life insurers show a higher propensity to invest in private credit than health and property and casualty (non-life) insurers.
Aligned with Private Credit Risks
Insurers are fully aware of the risks involved in private credit. According to the Mercer study, the primary concerns highlighted are the compression of the illiquidity premium and the narrowing of spreads, reflecting a desire to be adequately compensated for liquidity constraints. Other noted issues include the deterioration of underwriting standards and covenants, as well as an increase in defaults, spread widening, or payment-in-kind (PIK) structures—factors associated with borrower stress or a potential loosening of lending standards as the market matures.
“Capitalizing on the benefits of private credit requires insurers to conduct a rigorous manager selection process, choosing those with proven capabilities in origination, underwriting, portfolio construction, and special situations management to navigate the next phase of the credit cycle,” notes Amit Popat, Global Head of Financial Institutions at Mercer.
Capabilities Gap in Private Markets
The survey reveals a clear gap between insurers’ interest in private markets and their readiness to capitalize on opportunities. Only 30% state they possess “most” of the necessary capabilities to invest with confidence, while 29% acknowledge having only “some” of them.
This lack of resources limits insurers’ ability to allocate capital, achieve sufficient diversification in private markets, and maintain appropriate allocations with ongoing due diligence. Against this backdrop, investment partnerships are growing to secure required expertise in manager evaluation, cash flow modeling, capital treatment, liquidity management, and execution support.
“Even the largest insurers recognize they do not possess all origination capabilities or resources internally, leading them to seek specialized external managers in private credit to fill gaps and enhance risk-adjusted returns,” points out Josh Zwick, partner in the Insurance and Asset Management practice at Oliver Wyman. “Everyone wants to strengthen their capabilities, and that often means bringing in partners to navigate the complexity across the diverse segments of the private credit market,” he adds.
AI Still Plays a Limited Role in Insurer Investing
The capability gap is also mirrored in the adoption of artificial intelligence. More than half of insurers report not using AI in a significant manner. Fewer than a third employ it in data analytics and alternative investment research. The most immediate AI applications within investment teams are data integration, scenario generation, document review, manager monitoring, and risk analysis.
Finally, the study highlights that scale is a decisive factor: 75% of entities managing over $100 billion report significant AI use, compared to barely 10% of those managing under $1 billion.
