Key Takeaways
- • 139 PE-owned life insurers managed about 8 percent of U.S. life insurance cash and assets, roughly $700 billion, in 2024, up from about $1 billion in 2010, according to the American Action Forum analysis.
- • PE-backed insurers controlled an estimated 25 percent of U.S. individual-annuity liabilities as of 2024, making annuities the central channel of PE's life insurance expansion.
- • Post-2008 bank capital rules made bank ownership of insurers costly, opening the door for PE firms to acquire life insurers and launch de novo carriers.
- • Low interest rates after the 2008 crisis pushed insurers toward alternative assets such as private equity, private credit, and hedge funds, where FSOC data show life insurer holdings near $368 billion in 2024, up roughly 130 percent from 2016.
- • Policymakers should monitor opacity in alternative holdings and offshore reinsurance, which could transmit risk across the financial system during a period of stress.
Summary
Private equity firms have taken an increasingly large share of the U.S. life insurance market. According to the American Action Forum, 139 PE-owned life insurers collectively managed about 8 percent of U.S. life insurance cash and assets, roughly $700 billion, in 2024, compared with about $1 billion in 2010. A separate $300 billion in assets sits with life insurers held as portfolio companies within PE funds, according to a McKinsey report cited in the analysis. McKinsey also reports that private-capital-backed insurers, a group that includes PE firms, command 13 percent of the insurance industry market share, up from 1 percent in 2012.
The expansion is concentrated in annuities. PE-backed insurers controlled an estimated 25 percent of U.S. individual-annuity liabilities as of 2024. The Wall Street Journal, citing A.M. Best data, reported in December 2025 that PE firms controlled about 20 percent of annuity reserves, up from 2 percent in 2011, and that Athene, the life insurance arm of Apollo, has become the world's largest seller of annuity policies. McKinsey estimates U.S. individual annuity sales exceeded $450 billion in 2025, up from $426 billion in 2024.
The analysis identifies five drivers of PE's life insurance footprint. First, post-2008 regulatory changes made bank ownership of insurers expensive, as the Financial Times noted, prompting many bank-owned insurers to be sold. Second, PE firms' experience in alternative asset selection may enhance returns for their insurance affiliates. Third, PE firms earn asset management fees from the insurers they own. Fourth, annuity premiums provide more permanent capital than the typical 7-to-10-year PE fund cycle. Fifth, offshore affiliated reinsurance can reduce capital constraints and enable greater underwriting.
The report weighs benefits against risks. Potential gains include more policy options, lower prices for insurance and annuities, and cheaper financing for corporate borrowers. The risks center on opaque, hard-to-value alternative assets that may be difficult to sell at fair value in stress, and on offshore reinsurance that could create systemic vulnerabilities if interconnections among insurers, reinsurers, and PE firms are not well understood. Life insurers hold roughly $11.5 trillion in financial assets as of Q2 2026, about one-third of U.S. GDP, and the analysis concludes that policymakers should remain attentive to these developments.
The expansion is concentrated in annuities. PE-backed insurers controlled an estimated 25 percent of U.S. individual-annuity liabilities as of 2024. The Wall Street Journal, citing A.M. Best data, reported in December 2025 that PE firms controlled about 20 percent of annuity reserves, up from 2 percent in 2011, and that Athene, the life insurance arm of Apollo, has become the world's largest seller of annuity policies. McKinsey estimates U.S. individual annuity sales exceeded $450 billion in 2025, up from $426 billion in 2024.
The analysis identifies five drivers of PE's life insurance footprint. First, post-2008 regulatory changes made bank ownership of insurers expensive, as the Financial Times noted, prompting many bank-owned insurers to be sold. Second, PE firms' experience in alternative asset selection may enhance returns for their insurance affiliates. Third, PE firms earn asset management fees from the insurers they own. Fourth, annuity premiums provide more permanent capital than the typical 7-to-10-year PE fund cycle. Fifth, offshore affiliated reinsurance can reduce capital constraints and enable greater underwriting.
The report weighs benefits against risks. Potential gains include more policy options, lower prices for insurance and annuities, and cheaper financing for corporate borrowers. The risks center on opaque, hard-to-value alternative assets that may be difficult to sell at fair value in stress, and on offshore reinsurance that could create systemic vulnerabilities if interconnections among insurers, reinsurers, and PE firms are not well understood. Life insurers hold roughly $11.5 trillion in financial assets as of Q2 2026, about one-third of U.S. GDP, and the analysis concludes that policymakers should remain attentive to these developments.
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