Insurers Increase Private Credit Allocations in 2026
Private credit’s next major source of growth may not come from wealthy individual investors.
It may come from insurance companies.
A new global survey found that 57% of insurers plan to increase their private-credit exposure during the next 12 to 24 months. Demand is even stronger among large insurers and life-insurance companies.
That sounds encouraging for private-credit managers and commercial borrowers. But there is an important condition attached: insurers are not simply searching for the highest possible yield.
They want predictable cash flow, disciplined underwriting, dependable collateral, strong covenants, and managers capable of handling troubled loans.
For Apex and other firms building private-credit platforms, the signal is clear:
Institutional capital is available, but access will depend on institutional-quality operations.
Private credit’s investor base is changing
Private credit has attracted considerable capital from high-net-worth investors seeking income and diversification. Recent redemption pressure, however, has exposed a mismatch between illiquid loans and investors who may want quicker access to their money.
Insurance companies operate differently.
They generally have long-term liabilities that can be matched with longer-duration assets. That can make them better able to accept the limited liquidity associated with private loans.
According to Reuters’ July 24 private-credit review, the market appears to be shifting toward institutions that can accept longer holding periods while some wealthy investors become more cautious about valuations and limited exit options.
This does not mean individual investors will disappear from private credit. It means managers may increasingly build different structures for different capital sources.
A product designed for an insurer should not be structured or communicated exactly like one intended for a high-net-worth investor.
The institutional appetite is substantial
The 2026 Global Insurance Investments Survey included 123 insurers from 24 countries representing more than $4 trillion in investment assets.
Its findings show significant demand:
- 57% of insurers plan to increase private-credit allocations within 12 to 24 months.
- 65% of U.S. insurers expect to increase their exposure.
- 81% of insurers managing more than $25 billion plan to increase allocations.
- 73% of life insurers expect to allocate more to private credit.
- Only 32% of insurers planned to increase private-credit exposure in the comparable 2024 survey.
This is not merely a search for additional leveraged-buyout loans.
Insurers expressed particular interest in:
- Investment-grade direct lending
- Private placements
- Asset-based finance
- Structured credit
- Net-asset-value lending
- Fund finance
That broader mandate could create opportunities for private-credit managers with expertise outside traditional sponsor-backed corporate lending.
Asset-based finance may receive greater attention
The interest in asset-based finance is especially relevant to businesses with measurable collateral and identifiable cash flows.
Rather than depending solely on a borrower’s general promise to repay, asset-based structures may be supported by:
- Accounts receivable
- Inventory
- Equipment
- Commercial real estate
- Contractual payments
- Lease payments
- Other identifiable financial or physical assets
These structures can provide capital partners with greater visibility into where repayment is expected to come from.
Receivables financing offers a straightforward example. A company completes work for a creditworthy customer, issues an invoice, and waits for payment. Financing can be advanced against eligible receivables, with repayment tied to the customer’s eventual payment.
The structure does not eliminate risk. Invoice disputes, dilution, customer concentration, fraud, and weak documentation can still cause losses.
But when properly underwritten and controlled, receivables can create a relatively transparent connection between collateral, cash flow, and repayment.
That is precisely the kind of relationship institutional capital providers want to understand.
More institutional money will not weaken underwriting
It would be easy for borrowers to interpret increasing insurer allocations as a sign that private loans will become easier to obtain.
The survey suggests the opposite.
Insurers identified several significant concerns:
- 66% cited shrinking illiquidity premiums and tighter spreads.
- 54% were concerned about deteriorating underwriting or weaker covenants.
- 51% pointed to rising defaults, wider spreads, or payment-in-kind structures as signs of potential borrower stress.
Insurers want private credit to produce additional return compared with similarly rated public bonds. They do not want that additional return to come from poorly understood risk.
As more capital competes for quality loans, managers can face pressure to:
- Increase leverage
- Accept weaker documentation
- Reduce pricing
- Loosen covenants
- Finance lower-quality borrowers
- Make optimistic collateral assumptions
- Depend too heavily on refinancing for repayment
Disciplined managers must resist that pressure.
A fund does not serve its investors by deploying capital quickly into loans that cannot withstand a downturn.
Borrowers should prepare for institutional scrutiny
Institutional capital can increase financing capacity, but it also raises expectations for the borrower.
A business seeking asset-based or private-credit financing should be prepared to provide:
- Historical financial statements
- Current interim financials
- Detailed debt schedules
- Accounts-receivable aging reports
- Customer concentration data
- Inventory reports
- Collateral documentation
- Tax and lien information
- Cash-flow projections
- Management biographies
- A precise use of funds
- Primary and secondary repayment sources
- Downside and stress-case assumptions
Commercial real estate borrowers should also expect detailed analysis of:
- Sustainable net operating income
- Tenant quality
- Lease expirations
- Property condition
- Sponsor liquidity
- Market vacancy
- Capital expenditures
- Debt-service coverage
- Valuation
- Refinance and sale assumptions
When institutional money ultimately supports a loan, each material assumption must be defensible beyond the initial capital provider.
A clean, complete financing package can therefore become a competitive advantage.
Private-credit managers need more than a compelling strategy
Institutional investors do not select managers based only on an attractive presentation.
They examine whether the manager can consistently originate, underwrite, monitor, and resolve loans.
The insurance survey found that only 30% of respondents believed they possessed most of the private-market capabilities needed to invest confidently. This creates an opportunity for outside managers—but only those able to fill the capability gap.
An insurer-ready private-credit manager should be able to demonstrate:
Proprietary or defensible origination
Where do transactions come from, and why can the manager access opportunities that larger competitors may overlook?
Consistent underwriting
Does the firm apply documented standards across leverage, collateral, cash flow, concentration, covenants, and exit risk?
Portfolio construction
How are risks diversified by borrower, industry, geography, maturity, collateral, and loan type?
Ongoing monitoring
How frequently are financial statements, borrowing bases, covenant compliance, collateral values, and payment activity reviewed?
Workout capability
What happens when a borrower misses a payment, violates a covenant, or experiences financial distress?
Reliable reporting
Can investors receive accurate portfolio, valuation, performance, concentration, and risk information on a consistent schedule?
Operational controls
Are servicing, custody, documentation, valuation, compliance, and cash-management responsibilities clearly assigned?
Institutional capital is attracted to investment performance, but it stays when the operational foundation inspires confidence.
Secondaries are becoming part of the liquidity solution
Limited liquidity remains one of private credit’s central challenges.
A private loan cannot usually be sold as easily as a publicly traded bond. An investor that needs cash may therefore have to sell at a discount, wait for loan repayment, or transfer an entire portfolio through a negotiated transaction.
The private-credit secondary market is growing in response.
Reuters reported that GCM Grosvenor raised $1.2 billion for its first dedicated private-credit secondaries strategy, while Ares raised $7.1 billion for its inaugural private-credit secondaries fund.
These funds can purchase seasoned loans or portfolio interests from investors seeking liquidity, rebalancing exposure, or reducing long-term commitments.
For private-credit managers, the development of a stronger secondary market may make the asset class more investable. But it should not be used to create unrealistic liquidity expectations.
The original fund structure must still match the life of the underlying assets.
Family offices should adopt the same discipline
Family offices may not face the same insurance regulations or liability-matching requirements, but they can apply similar standards when evaluating private credit.
The strongest questions include:
- Is the yield supported by cash flow or by increased leverage?
- What collateral exists, and who controls it?
- Are valuations independently supportable?
- How much income is being paid in cash rather than added to the loan balance?
- Are covenants strong enough to identify problems early?
- How concentrated is the portfolio?
- What experience does the manager have with workouts?
- How much liquidity should the family retain outside the investment?
- Is the additional yield sufficient for the risks and holding period?
Private credit should not be evaluated as a replacement for every other asset class.
It should be evaluated as one component of a diversified capital strategy, with appropriate attention to risk, liquidity, and preservation.
What this means for Apex’s private-credit strategy
For Apex Commercial Funding, the institutional shift supports a practical conclusion: a private-credit platform should be built to institutional standards from the beginning.
That means treating sourcing, underwriting, servicing, compliance, investor reporting, and risk management as core elements—not administrative tasks to address after capital is raised.
Apex’s exposure to commercial real estate finance, factoring, accounts-receivable financing, and asset-based structures may align with the market’s growing interest in identifiable collateral and contractual cash flows.
However, alignment alone is not enough.
Institutional capital partners will expect the strategy to clearly define:
- Eligible and prohibited loan types
- Borrower and collateral requirements
- Target maturities
- Pricing parameters
- Advance rates and leverage limits
- Concentration limits
- Reserve policies
- Servicing procedures
- Default and workout protocols
- Valuation methods
- Investor reporting
- Governance and conflicts controls
The objective should not be to build the broadest possible private-credit platform.
The objective is to build a focused platform whose risks can be understood, measured, and managed.
The Apex perspective: patient capital demands disciplined credit
The growing insurer appetite for private credit is encouraging because it expands the potential pool of long-term capital available to businesses and commercial real estate borrowers.
But patient capital is not careless capital.
Insurance companies must meet obligations that extend years or decades into the future. They will favor managers who demonstrate discipline when competition is intense—not only when markets are favorable.
At Apex, we believe capital access begins with presenting the transaction from the capital provider’s perspective.
That means answering three questions clearly:
- Why should this borrower receive capital?
- What protects the capital during the loan term?
- How will the capital be repaid if the original plan changes?
When those answers are supported by reliable documentation and conservative underwriting, a transaction becomes easier to evaluate and more credible to serious capital partners.
Prepare for the capital that is entering the market
Institutional demand could support meaningful growth across direct lending, private placements, asset-based finance, and commercial real estate credit.
The strongest opportunities will not simply offer higher returns. They will combine understandable collateral, dependable cash flow, disciplined controls, and multiple repayment paths.
If your company or commercial real estate project requires financing—or your organization is evaluating asset-backed private-credit opportunities—Apex Commercial Funding can help assess the capital need, strengthen transaction presentation, and identify an appropriate financing structure.
Contact James Fillmore II at James@apexcommercialfunding.com or 240-535-9291 for a confidential capital discussion.
Financing and investment opportunities are subject to underwriting, due diligence, applicable laws, investor eligibility, and final approval. This article is informational and does not constitute an offer of credit or securities, legal advice, or investment advice.
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