Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324828 
Year of Publication: 
2025
Series/Report no.: 
Working Paper No. WP 2025-09
Publisher: 
Federal Reserve Bank of Chicago, Chicago, IL
Abstract: 
We show that life insurers have increased their lending in the private placement market over the past decade, totaling $849 billion, or 14%, on life insurers' balance sheets in 2024. A substantial part of the growth stems from private credit extension to financial borrowers and to privately placed asset-backed securities. We document that private equity-owned (PE-owned) life insurers drive these trends. We also provide evidence that these investments have about 80 basis points higher spreads compared to public bonds and foster PE-owned insurers' growth in the annuities market. A one standard deviation increase in financial private placement investments is associated with 0.05 percentage points higher market share in the annuities market.
Subjects: 
Private Credit
Private Placements
Annuities
Private Equit
JEL: 
G21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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