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ISSUE 110 | OCTOBER 2025
Insurers’ exposure to private credit market raises questions INSURANCE companies’ increasing exposure to private credit is raising some concerns, with regulators saying they’re keeping an eye on the development. In July, Professor Ludovic Phalippou from Saïd Business School, University of Oxford spoke about the risks of insurance companies piling into private credit at a Financial Services Regulation Committee hearing. “They are allowed to leverage 10 times $1 (£0.74) invested in a private credit fund, which is a fairly risky type of investment to begin with, and allowing insurance companies to have such a high leverage on something already levered is quite a wild move,” he said. He noted that they are sitting on top of many layers of leverage that could impact their ability to pay out, if
there were a natural disaster in the UK. “People would go to the insurance companies, which would not be able service the claims because they had piled up these private credit funds, the valuations were wrong, they would not be able to withdraw, the liquidity was not what they
anticipated, they had all these layers of debt, et cetera,” he said. “The UK government would then have to step in.” Alternative Credit Investor reached out to regulators around Europe to find out whether they are concerned about the risks of insurers investing into private credit. Only the Swiss
Financial Market Supervisory Authority (Finma) and the Italian Institute for the Supervision of Insurance (IVASS) responded. Finma said: “Private credit represents less than one per cent of the investments of Swiss insurance companies, though we are currently observing a sort of >> 4