Private Equity Pushes Life Insurers to Rethink Their Business Model

Private equity is no longer quietly entering the life insurance market—it’s reshaping it. In this Future of Risk conversation with Insurance Thought Leadership, Oliver Wyman’s Mick Moloney outlines how firms like Apollo, Blackstone, and KKR have turned insurance balance sheets into platforms for private credit growth, and why traditional insurers are under pressure to catch up.

Moloney explains how low interest rates, capital constraints on public insurers, and regulatory shifts post-financial crisis created an opening for private equity to step in. By leveraging life insurers’ predictable liabilities, private equity firms generate steady inflows of capital that fuel their credit investment strategies—particularly in underserved lending areas where they see higher risk-adjusted returns. The result has been massive growth: private equity firms’ market caps have skyrocketed while traditional insurers and asset managers have lagged far behind.

This trend, Moloney notes, has forced legacy insurers to consider a strategic pivot. Some are exploring asset-management-led models, making acquisitions in the private credit space, or increasing their visibility to investors. Yet, incumbents face structural challenges, including valuation gaps and operational inertia, which could hinder rapid transformation.

With private equity-backed insurers gaining momentum and traditional carriers racing to adapt, the next five years could redefine the life insurance sector. As Moloney puts it, the question isn’t whether this shift will continue—but whether the industry’s longstanding players can change fast enough to survive it.