Bermuda life and annuity insurers hold $435.7bn in private credit

Bermuda's life and annuity insurers hold an estimated $435.7 billion in privately originated credit, according to an S&P Global Market Intelligence analysis reported by Royal Gazette Bermuda Re.

Private credit accounted for 33.7% of the $1.29 trillion in cash and invested assets across the 122 insurers whose filings S&P examined. The category includes privately placed corporate debt, mortgage loans and interests in loan funds.

S&P found 60.1% of the private credit it examined was valued using Level 3 inputs, against 3.6% for public credit. Level 3 marks rely on estimates and assumptions where observable market prices are scarce. For an insurer ceding to a Bermuda reinsurer, or holding its paper, that ratio governs how much of a counterparty's balance sheet depends on internal valuation rather than traded prices.

The analysis identified $58.7 billion in affiliated private credit, meaning holdings issued through vehicles linked to the insurer's own corporate group. Athene Annuity Re Ltd, part of Apollo Global Management's insurance business, accounted for about half of that exposure and reported $74.17 billion in private credit holdings overall.

Some Apollo-linked vehicles appeared in the filings of more than one insurer. Fourteen insurers reported a combined $5.82 billion in AP Grange Holdings LLC, and two other Apollo-linked vehicles, AMAPS 1 and AMAPS 2, accounted for a combined $5.78 billion.

Corporate private placements were the largest category S&P identified, at $120.89 billion, followed by private asset-backed securities at $70.29 billion and direct loans at $9.35 billion.

The analysis came days after the Bermuda Monetary Authority published company-by-company asset and liability statements for year-end 2025 covering all registered long-term insurers, as Insurance Capital Daily previously reported. Those statements include spreadsheets detailing each company's reserves, bonds and loans, structured assets, commercial and residential mortgage loans and derivatives.

Life reinsurers invest policyholders' assets to meet long-dated annuity and pension obligations. Private credit offers the potential for higher returns, but it can take time to sell if a reinsurer needs to raise money, because it does not trade on public markets. Both the valuations and the group-linked holdings are drawing greater scrutiny as private-equity firms deepen their ties with life insurers, the Royal Gazette reported.