Marsh Survey Reveals That Insurers’ Private Credit Appetite Continues to Grow, but Discipline Remains Paramount

Marsh (NYSE: MRSH) released findings from its 2026 Global Insurance Investments Survey, which polled 123 insurers from 24 countries with more than US$4 trillion in total investment assets. The survey was conducted between March and April 2026. It shows that insurers' demand for private credit remains strong but increasingly selective. More than half of respondents (57%) plan to increase private credit exposure in the next 12 to 24 months, a sharp shift from the Mercer and Oliver Wyman 2024 Global Insurance Investments Survey, in which 32% of insurers planned to increase private credit allocations.

Insurers' appetite is concentrated in the investment-grade segment of the market. Investment-grade direct lending and private placements drew 40% of respondents, while investment-grade structured credit, asset-based finance, NAV lending and fund finance drew 38%. David Morrow, Mercer's Global Insurance Proposition Leader, described private credit as a compelling opportunity for insurers, particularly in asset-backed areas, noting that it allows diversification away from corporate risk while offering meaningful yield pickup over similarly rated investment-grade public bonds.

Demand varies by region and size. In the United States, 65% of insurers plan to increase allocations, compared with 74% in Canada, while only 51% of European and 46% of UK insurers do so. Interest is strongest among large insurers: 81% of those with more than $25 billion in assets plan to increase allocations, versus 46% of smaller insurers. By line of business, life insurers (73%) were more likely to allocate than health insurers (56%) and P&C insurers (40%).

Insurers remain attentive to risk. The most cited concern is a reduced illiquidity premium and tighter spreads (66%), followed by deteriorating underwriting standards or covenants (54%) and rising defaults, spreads or payment-in-kind structures (51%). Amit Popat, Mercer's Global Head of Financial Institutions, said capitalizing on private credit will require rigorous manager selection, with emphasis on sourcing, underwriting, portfolio construction and workout capability through the next phase of the credit cycle.

The survey also identifies a capability gap. Only 30% of respondents report having most of the private markets capabilities needed to invest confidently, and 29% have only some. Josh Zwick, a Partner in Oliver Wyman's Insurance and Asset Management Practice, said even the largest insurers lack in-house origination capacity and are turning to outside private credit managers to fill gaps and boost risk-adjusted yields. AI adoption shows a similar pattern: 54% of insurers say they are not using AI meaningfully, and fewer than a third (29%) use it to analyze alternative investment data. Current applications include data integration, scenario generation, document review, manager monitoring and risk analysis.