Insurance companies are expanding their use of external asset managers for their general accounts, as the companies diversify their portfolios and require bespoke solutions. Insurance assets managed by external managers rose to $5.5 trillion in 2025, according to research from Clearwater Analytics and DCS Financial Consulting, a 23% year-over-year increase worth approximately $1 trillion.
Third-party general account assets under management stood at $1.4 trillion in 2014.
External managers are increasingly competing for insurance mandates, with specialist and midsize managers gaining ground on bigger companies: Over the past 10 years, the amount of total insurer assets managed by the 10 largest investment managers declined to 59% from 70%.
“Insurers are increasingly utilizing the insurance-specific capabilities offered by managers,” the Clearwater report stated. “These include customized reporting, investment accounting support, and [asset liability matching] expertise—delivered with an insurance aligned framework.”
Insurers in Europe and the U.K. were major users of external asset management. Firms in the combined regions more than doubled their allocation to outside managers, reaching $2.1 trillion in 2025 from $1 trillion in 2021.
Additionally, assets under advisement by external consultants have doubled to $1.8 trillion over the past two years. Consultants are playing bigger roles for insurers, which have been expanding the number of managers and strategies within their portfolios.
Private Credit Allocations Grow
Clearwater Analytics, which generally does not release specific asset-class breakdowns until following the publication of its insurance asset management report, made an exception this year regarding private credit investment, which the firm said have grown significantly.
Five years ago, private credit accounted for 10% of insurer portfolio investments; now it accounts for 16%, representing 20% year-over-year growth, according to the report. Insurers are primarily investing in traditional private placements, middle market corporate lending and structured notes. The report also documented noticeable growth in investment in commercial and residential mortgages.
“Private credit allocations among insurers—and corresponding manager AUM—have continued to expand at a rapid pace, a trend that persisted into the 2026 report,” Clearwater stated. “Insurers across the size spectrum are allocating to these markets, both as a standalone asset class and through structured debt, often in the form of rated notes.”
Several insurance asset managers previously highlighted to CIO that insurers have been active primarily in the investment-grade segments of the private-debt market. The same managers brushed off concerns about credit quality in private credit investments and about increased redemptions made by investors in retail-focused business development companies.
Insurers are also increasingly being acquired by or partnering with alternative asset managers, as seen in Blackstone’s 2025 partnership with Legal & General, Blue Owl Capital’s 2024 acquisition of specialized insurance asset manager Kuvare, and KKR’s 2024 acquisition of Global Atlantic.
“Recent market commentary has pointed to emerging pressures in certain segments of private credit, particularly where underwriting standards weakened amid rapid market growth and increased competition for assets,” Clearwater’s report stated. “That said, industry feedback suggests insurers have generally maintained a disciplined approach to manager selection, portfolio construction, and structural protections, often emphasizing senior secured positions. While many portfolios are expected to be positioned to navigate potential stress, the degree of resilience across strategies and managers will become clearer through a more prolonged credit cycle.”
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Tags: Clearwater Analytics, insurance