How insurance became the lifeblood of private credit, and why risk and compliance have never been more important.

In a recent article, the Financial Times highlighted one of the most significant shifts in financial services today: the increasingly close relationship between life insurers and private capital. What began as a niche strategy among a small group of alternative asset managers has become industry standard, with profound implications for balance sheets, risk profiles and the competitive landscape.

Private capital-backed insurers are now holding unprecedented volumes of private credit and other illiquid, hard-to-value assets, often more than one-third of their portfolios. The Financial Times notes growing regulatory concern around transparency, affiliated transactions and the potential mispricing of complex credit instruments, with fears that systemic risks may only surface in the next downturn.

At Leathwaite, our work across insurance, risk management and compliance reflects these themes:

• CRO and CCO hiring has surged, as insurers strengthen leadership to manage increasingly complex investment books and regulatory scrutiny.
• Risk operating models are being reshaped, with greater focus on independent and enterprise-wide second-line oversight.
• Regulatory expectations are rising, particularly around governance, valuation transparency and credible challenge.
• Boards are demanding more from risk and compliance leaders, especially in navigating asset-liability dynamics and credit cycle resilience.

What this FT piece ultimately underscores is something we’re seeing globally: