European insurers Axa and Allianz are resisting private credit expansion while North American rivals increase allocations to alternative assets. The divide reflects competing regulatory pressures across the Atlantic.
Axa CEO Thomas Buberl said the French insurer's private credit exposure sits "far below" competitors. Allianz chief investment officer Claire-Marie Coste-Lepoutre confirmed the German firm remains "very comfortable" with current positions, signaling no aggressive expansion plans.
North American Company for Life and Health Insurance, one of the largest U.S. fixed index annuity issuers, is moving the opposite direction. The firm launched a growth-focused index option for its Secure Horizon FIA products. Executive Tom Haines said the index "has low correlation to the other indices in the portfolio," adding diversification.
Europe's Solvency II capital rules impose higher charges on illiquid assets, making private credit less attractive from a regulatory capital perspective. North American insurers face different constraints—pressure to generate higher yields on general account portfolios to meet fixed index annuity guarantees.
Private credit typically offers 200-400 basis points above comparable public bonds. For North American insurers promising minimum guaranteed returns plus market-linked upside, that yield premium justifies liquidity risk and the need for sophisticated credit analysis.
The divergence also reflects different views on market timing. European insurers may be waiting for better entry points as private credit markets mature and pricing becomes more transparent. North American firms appear willing to accept current valuations for immediate yield enhancement.
Both sides are using reinsurance transactions and strategic divestitures to manage risk as they adjust alternative asset allocations. These moves maintain balance sheet flexibility while pursuing higher-yielding investments in private markets.
