S&P Global Ratings, the credit rating agency, reports that insurers and reinsurers in the European Union have been steadily increasing their allocation to private credit.
The findings are presented in its Insurance Brief published on April 23, 2026, which the company notes does not constitute a rating action.
S&P Global Ratings states that EU-based re and insurers have raised their exposure to private credit to 5.8% in the second quarter of 2025 from 3.9% in the fourth quarter of 2016.
The company attributes this increase to a wider effort among insurers to diversify investment portfolios and improve returns. It highlights that life insurers generally allocate more to private credit than other segments, largely due to their long-term liabilities linked to products such as life savings and retirement business.
According to S&P Global Ratings, certain areas of the private credit market, including distressed debt, junior securitisation tranches, and leveraged buyout debt funds, may carry higher risk.
However, the company notes that EU-based re and insurers have relatively limited exposure to these segments, which reduces their overall impact on portfolio risk profiles.
Drawing on data from the European Insurance and Occupational Pensions Authority, S&P reports that private credit accounted for 5.1%, or about €515 billion, of EU-based re and insurers’ investments in 2024. The company adds that life insurers represented 57.5% of this exposure, composite insurers 23.2%, non life insurers 14.6%, and reinsurers 4.7%, reflecting differences in business models and liability structures.
S&P explains that larger global insurers and reinsurers began developing private credit capabilities more than a decade ago, while smaller regional firms entered the market later and often rely on external asset managers to gain exposure.
The company also points to regulatory developments as an important influence on investment strategies. It notes that the planned update to the Solvency II framework in January 2027 could affect capital requirements and may increase the attractiveness of securitised assets such as collateralised loan obligations. S&P also references earlier Solvency II adjustments in 2019, which reduced capital charges for certain unrated debt under defined conditions and supported growth in private credit allocations.
S&P describes private credit as generally unrated and less liquid than traditional fixed income assets, which often results in higher capital charges. At the same time, the company notes that some instruments within the market, such as promissory notes and highly rated senior tranches of collateralised loan obligations, can carry comparatively lower risk.
The company further observes that exposure to illiquid assets is significant in absolute terms but more moderate relative to overall portfolios. It cites data indicating that German re and insurers hold around €92 billion in non listed corporate bonds, while French peers hold about €28 billion. S&P Global Ratings adds that mortgages and loans account for roughly 50% of private credit exposure in Germany and about 25% in France, with higher levels when including investments held through funds.
S&P notes that promissory note lending contributes to Germany’s higher exposure to non listed corporate bonds, often involving domestic borrowers such as government bodies, municipalities, and highly rated corporates, reflecting a degree of home market preference among EU-based re and insurers.
“EU-based re/insurers’ exposure to illiquid assets is sizeable in absolute terms but limited in relative terms. We will continue to monitor their exposure to private credit and its implications for their financial strength and resilience,” S&P Global Ratings Credit Analyst Volker Kudszus added.
Looking ahead, S&P Global Ratings states that it will continue to assess the impact of rising private credit exposure on the financial strength and resilience of EU-based re and insurers. The company adds that while it does not expect the upcoming Solvency II update to significantly alter overall asset allocation, changes in capital requirements could still influence future investment decisions.
