Geoff Cornell
Insurance investors are not slowing their deployment of capital to private credit and other illiquid investments; rather, they are diversifying their holdings to include additional alternative asset classes, according to Geoff Cornell, AllianceBernstein’s CIO of insurance, in an interview with CIO.
While private credit has come under stress—rising interest rates have led to loan defaults, and investor anxiety about credit quality has increased demand for retail investor redemptions—Cornell highlights the importance of private credit and other alternative asset classes to insurer portfolios.
“One trend that everyone’s seeing, and it’s kind of being questioned right now, is the move to private assets from what, typically over the past decade, has been a bigger lean on public assets,” Cornell says. “The reason why insurers are doing that is because those cash flow streams that they’re trying to invest for are very predictable, very sticky and don’t need a lot of liquidity.”
Same Money, New Approaches
Cornell, who oversees $200 billion in insurance assets at the $867 billion asset manager as its inaugural insurance CIO, notes that insurers have long been investors in alternative strategies in the syndicated loan markets, but insurers are now looking to markets historically dominated by banks, such as asset-based finance.
According to Goldman Sachs Asset Management’s 2026 Global Insurance Survey, 38% of surveyed insurers planned to increase their deployment of capital to private markets.
“What [insurers are] moving into now is more of predominantly historically bank-related markets like asset-based finance, where you’re providing financing for things like consumer loans, residential loans, equipment finance loans, aviation—things like that, which banks have typically dominated,” Cornell says. “Insurers are finding that they are perfect lenders for that, because they can match those assets with their liabilities.”
GSAM’s survey noted that within private equity, insurers are primarily looking to increase their exposure to infrastructure equity, traditional private equity and secondary-market investments.
Cornell says insurers are also increasingly tapping into securities financing residential mortgage loans and portfolio financing—private equity firms looking for financing for their portfolio companies from insurers. Infrastructure’s appeal lies in its ability to match long-dated liabilities.
“There’s high demand for insurance companies, historically and going forward—because of pension risk transfers, they’re kind of a perfect asset: You’ve got long-dated cash flow from pensioners that may still be working or retired, but still have a long time to live,” Cornell says. “Those assets match up with them perfectly and provide a spread that make the pension risk transfer economically viable.”
Risks in Credit
The GSAM survey noted that 54% of insurers believe markets are currently in the late stage of the credit cycle, with credit quality beginning to deteriorate, reflecting an uncertain outlook for the labor market.
The increased scrutiny on private credit has seen firms such as Blue Owl Capital, Apollo Global Management, Ares, Blackstone and Cliffwater all gate redemption that had exceeded caps for their semi-liquid funds.
Cornell notes that insurers continue to invest in investment-grade private credit and are largely unphased by the increased demand for redemptions.
“It’s a little bit of a question mark right now on private assets, because what we’re seeing in the below-investment-grade private asset space is concerns around credit, so people are kind of saying, ‘Should we be going more into private assets?’” Cornell says. “But insurance companies generally dominate the investment-grade space, not the below-investment-grade space, so I predict the move into private assets will still occur, just maybe not at below-investment-grade.”
Cornell notes that AB’s middle market platform, AB Private Credit Investors, has been investing in the asset class for more than a decade.
“Some of this concern around private credit is overblown,” Cornell says. “We always think there are going to be losses [in below-investment-grade]; we just happen to think you’re getting compensated on the yield side for those losses.”
Cornell says he expects skepticism of private credit may cause a reevaluation of risk tolerance for many investors.
“If you have excess liquidity going into private assets, I think what’s going on in the private world today is somewhat predictable and healthy in that it’s making people question: What are the true risks of private markets?” Cornell says. “Should I be investing in them—should I just be grabbing as much market share as I possibly can?—or should I be more thoughtful?”
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Tags: AllianceBernstein, Geoff Cornell, insurance