Over the past few years, insurers have been moving deeper into private credit and alternative assets. It is not always obvious from the outside, but the scale is growing. Deals like American International Group partnering with CVC Capital Partners, or increased activity from firms such as Oaktree Capital Management, are part of a broader pattern.

Insurance capital is flowing into areas that used to be dominated by banks or specialised lenders. That raises a slightly uncomfortable question: are insurers still playing it safe, or are they quietly stepping into the world of shadow banking?

It’s not just about chasing yield

At first glance, it is easy to say insurers are just looking for better returns. Bond yields have been low for years. Naturally, they are exploring alternatives. But that explanation only tells part of the story.

According to Dr Jassem Alokla, Senior Lecturer in Finance at ARU, England, United Kingdom, the shift is being driven by a mix of factors rather than a single trigger.

“All three — opportunity, necessity, and competitive pressure are at work,” he told International Finance.

There is definitely an opportunity element. Private credit tends to offer higher spreads than public bonds, partly because these investments are less liquid and often more complex. For insurers willing to hold assets long-term, that premium is attractive. Still, the bigger issue is structural.

Life insurers, in particular, are always trying to match long-term liabilities, things like annuities, with assets that generate predictable cash flows. In a world where traditional bonds do not always deliver enough return, that becomes harder to do. So, they look elsewhere.

“Insurers aren’t just chasing yield. They’re trying to close an asset-liability mismatch problem,” Alokla explains.

There is also the fact that banks have pulled back from certain types of lending since the 2008 global financial crisis. That gap didn’t stay empty for long. Private credit funds stepped in, and insurers followed, often through partnerships with asset managers.

In a way, insurers did not just decide to enter private markets. The market shifted, and they adapted.

The shift is real, but not dramatic yet

It would be easy to assume insurers are rapidly abandoning bonds, but they are not. Traditional fixed income still dominates portfolios. Government bonds and investment-grade corporate debt remain the core. That has not changed overnight.

What has changed is the mix within that core. There is a gradual move away from purely public bonds toward private credit, infrastructure debt, and real estate lending. It is not always visible unless you look closely at portfolio breakdowns, but the direction is clear.

Alokla describes it as ‘material and rising’, but not something that overturns the whole system.

Derek Guo, Chief Legal Officer at MetLife China, sees it as even more measured.

“It is not a significant shift, but a very slight move. Life insurance is still focused on steady and long-term return,” he told International Finance.

That difference in tone is interesting. It shows how this trend isn’t being experienced in the same way everywhere. In some markets, it feels like a meaningful evolution. In others, it still looks like a small adjustment. The truth is probably somewhere in between.

So…is this shadow banking?

This is where things get a bit more complicated. If you look at what insurers are actually doing, lending to companies through private credit, structuring deals, working with asset managers, it starts to resemble activities traditionally associated with banks.

Or, more precisely, with what’s often called shadow banking. Alokla acknowledges that similarity, but with a caveat.

“Partly, in a functional sense. Their private-credit intermediation resembles shadow banking,” he says. But he’s careful not to overstate it.

Insurers don’t take deposits. They operate under strict solvency rules. They’re regulated very differently from banks and most non-bank lenders. While the activity may look similar, the framework around it isn’t the same.

Guo takes a firmer stance, especially from a Chinese perspective.

“I don’t think so. Insurance is a highly regulated industry, and capital invested in private credit is closely monitored with public disclosure,” he added.

He also points out that regulators impose limits on how much insurers can invest in these areas.

So, whether insurers are part of the shadow banking system depends on how you define it. If you focus on what they do, the comparison holds. If you focus on how they are regulated, it becomes less clear.

The risks aren’t always obvious

One of the challenges with private credit is that the risks don’t always show up immediately. Unlike publicly traded bonds, these assets aren’t priced every day. Valuations often rely on internal models. That can make portfolios look stable, even when underlying conditions are changing.

“Transparency is uneven. There is a real risk of valuation error,” Alokla said.

That does not mean insurers are ignoring risk. Many have built sophisticated systems to manage these exposures. But across the sector, the level of transparency and consistency can vary.

Liquidity is another issue. Private credit is not easy to sell quickly. In normal conditions, that is fine — insurers typically invest for the long term. But in stressed scenarios, it can become a constraint.

At the same time, the structures themselves are becoming more complex. As insurers go deeper into private markets, they are dealing with layered products, bespoke deals, and sometimes indirect exposure through funds.

Guo acknowledges that the risk profile is changing.

“This will definitely increase the risks for insurers,” he says, comparing it to traditional fixed income.

At the same time, he points to safeguards, limits on concentration, strict monitoring of assets, and regulatory disclosure requirements.

What happens when things go wrong?

The real question is not how private credit performs in good times. It is what happens when things go bad. If defaults rise or valuations fall, insurers could face pressure on their balance sheets. That might show up as lower capital ratios.

There is also the issue of liquidity. While insurers are not banks, they are not completely immune to stress. Higher-than-expected policy surrenders, or other cash needs, could force them to raise funds, possibly at unfavourable prices.

Alokla points to several possible transmission channels, valuation markdowns, liquidity strain, and broader financial linkages.

“Interconnectedness can amplify shocks,” he says.

Still, he emphasises that insurers generally have strong capital buffers. They are not starting from a weak position. Guo, speaking from a legal perspective, keeps it more straightforward.

“We have solvency ratios strictly monitored by regulators,” he added.

In other words, the system is designed to absorb stress, even if the risks are evolving.

What about policyholders?

For most people, the real concern is not how insurers invest. It is whether those investments could affect payouts, savings, or retirement products. The short answer is: not immediately.

If private credit investments underperform, the first impact is usually on insurers themselves, their earnings, their capital, and their margins.

Only in more extreme scenarios would it start to affect policyholders directly. Alokla explains that modern insurance frameworks are built with buffers.

“The risk is not zero, but protection is substantial,” he noted.

Still, as insurers take on more complex assets, the margin for error narrows. It becomes more important that risks are properly understood, and managed.

Regulators are watching, but still catching up

Regulators aren’t ignoring this shift. In fact, across different regions, there’s growing attention on private credit exposure, valuation practices, and systemic risk. But keeping up isn’t easy.

“Data and valuation gaps persist,” Alokla notes.

Private markets are, by definition, less transparent than public ones. That makes oversight more challenging. Guo, again, offers a more confident view from China.

“I think the regulator is closely monitoring liquidity and solvency. The current framework can guide investment strategy,” he added.

That difference highlights something important: regulation isn’t uniform. The risks, and how they’re managed, can vary significantly depending on the market.

Temporary shift or something bigger?

So, is this just a response to current conditions, or something more permanent? There’s no single answer.

Alokla leans toward a longer-term view. The combination of low yields, evolving liabilities, and growing private markets suggests this trend isn’t going away anytime soon. The role of insurers in credit markets is expanding, even if gradually.

Guo is more cautious.

Both views make sense. Market conditions clearly played a role in accelerating the shift. But once insurers build capabilities in private credit, and start relying on those returns, it’s not always easy to step back.

A quiet transformation

For now, insurers still look like what they have always been: stable, conservative, and heavily regulated. But underneath, things are moving. They are allocating more capital to private markets. They are partnering with asset managers. They are stepping into spaces once dominated by banks.

It’s not a dramatic transformation. There’s no sudden break from the past. But it is a shift, and one that could reshape how credit flows through the financial system.

Whether that makes insurers more resilient or introduces new risks is still an open question. What is clear is that the line between traditional insurance and shadow banking is no longer as sharp as it once was, and that is quietly becoming one of the more important changes in global finance.

The post Insurers develop appetite for risk, explore world beyond bonds appeared first on International Finance.

Elaborating on this in a report, titled “Oman — Listed Insurance Industry Performance Analysis – Q3 2025”, released on December 22, BADRI said that the after-tax profit of the eight listed Omani insurance companies surged by 935%, shifting to a profit of OMR28.4 million (USD 73.9 million) in the first three quarters of this year (Q3 2025), registering a stunning turnaround from a loss of OMR3.4 million in the same period in 2024.

“The Sultanate’s biggest insurer, LIVA, which had recorded a loss the previous year due to adverse weather events, achieved a strong turnaround with a 226% increase in profit in Q3 2025, substantially enhancing overall industry results. Excluding LIVA, the sector still posted a robust 108% year-on-year profit growth. It is important to note that the net profit of takaful companies is reported on a combined basis, encompassing both policyholder and shareholder accounts for comparability,” the study stated.

At the same point in time, conventional insurers achieved a 13% revenue increase, with the cumulative figure rising to OMR472 million in Q3 2025 from OMR417 million in the corresponding period in 2024. LIVA drove this growth by posting a 24% increase and maintaining the largest market share.

“In the Shariah-compliant insurance market, the performance of takaful companies remained consistent with a modest 0.3% growth in revenue that increased marginally from OMR55.0 million in Q3 2024 to OMR55.1 million in Q3 2025. Notably, takaful insurers implemented IFRS 17 during the year, aligning their financial reporting with broader industry standards,” remarked the BADRI study.

Insurance service results for the analysed listed companies surged by 3,452%, rising from OMR0.8 million to OMR29.5 million, mainly due to LIVA’s operational turnaround. Excluding that, the overall increase would be 19% over the Q3 2024 figures.

Predicting the road for the Gulf country’s insurance sector, BADRI concluded, “Rising costs, higher climate-related claims, and aggressive pricing strategies are placing pressure on industry margins. To stay competitive, companies need to enhance risk management, refine pricing models, control expenses, and strengthen their financial position. Looking ahead, insurers that adapt swiftly, leverage advanced data analytics, and proactively plan for emerging risks will be best positioned to succeed in an increasingly challenging market.”

The post From a disastrous 2024, Oman’s insurance sector swings to profits in Q3 2025 appeared first on International Finance.

“Even as shifting global dynamics challenge insurers, the 2025 Global Insurance Outlook shows there have never been more viable paths to innovation-led growth across the industry. Indeed, the vast gaps in protections against cyber and climate threats – with 99% of losses from cyberattacks and 60% from natural disasters uninsured – along with the massive shortfall in retirement savings, present compelling value-creation opportunities. Strategically orienting the enterprise around richer data and fully modernised technology is one critical step,” says EY in its latest report.

The report also highlights how global insurers have delivered strong performance recently and are poised for steady gains in both mature and emerging economies, despite challenges. On the other hand, the rising demand for core protections and value-added services, along with new possibilities in risk assessment and pricing, will foster optimism within the industry about the future.

So, what can we expect from the industry in general?

The Impact Of Natural Disasters
Since losses from natural disasters now exceed USD 100 billion annually, they have become a significant challenge for insurers. Take the United States, for example, where insurers are avoiding high-risk regions such as Florida and California. As a result, property owners are confronted with higher premiums and more limited coverage.

This situation necessitates creative risk management techniques, with insurers using tools like predictive analytics and satellite imagery to more accurately assess and anticipate risks. Improving resilience and reducing financial strain will require cooperation with communities and governments.

Harnessing AI
Artificial Intelligence (AI) is transforming the insurance industry by enabling generative and predictive models to deliver highly customised experiences. Insurers are using artificial intelligence to improve fraud detection, streamline operations, and enhance underwriting procedures. Despite AI’s efficiency, issues such as algorithmic bias and data privacy need to be addressed. Strong governance frameworks must be implemented by insurers to ensure fairness and transparency in AI-driven decisions.

Operational Efficiencies And Automation
Insurance companies will be able to lower costs and improve service quality thanks to artificial intelligence-driven automation, which is expected to increase operational efficiency. Routine tasks can be automated, freeing up resources for strategic projects that improve compliance and customer satisfaction for insurers. This shift will also help insurers remain competitive in a rapidly changing market. However, to maximise these technologies, investments in workforce training will be necessary.

Embracing Customer-Centric Experiences
In sectors like retail and automotive, embedded insurance – where policies are bundled at the point of sale – is becoming more popular due to rising customer expectations. This model provides more accessibility and convenience, aligning with customer preferences for seamless, integrated solutions. To deliver value-added services that meet evolving demands, insurers must build strong partnerships and leverage technology.

The future of the insurance sector will depend on how well insurers manage these transformative trends, balancing creativity with ethical behaviour, and adapting to changing market conditions.

The post Insurance industry in 2025: Check out the key trends appeared first on International Finance.

It is reported that the hospital occupancy had significantly decreased due to the pandemic. With that, insurers will have a lesser payout compared to previous years. 

Fomca President Dr Marimuthu Nadason in a statement said “Notices are being sent to policyholders at the time when consumers are still struggling to make ends meet which is very unjust and unfair. Fomca advocates for the deferment of repricing rollout by insurance companies which was initially intended to take effect in 2020. However, due to the severe economic disruption caused by the pandemic, the one-year postponement does not provide enough breathing space for policyholders who remain burdened by economic and employment uncertainties.” 

According to the data from Association of Private Hospitals, it appears that private hospitals and clinics had seen a drop of nearly 70 percent. That in turn has led to a healthier loss/claims ratio and improved overall profitability for insurers. 

In November, AmMetLife Insurance had introduced a new plan, known as ProtectEase. CriticalEase and AmMetLife Insurance have developed a vision to help Malaysians to obtain health and financial protection during the pandemic, media reports said. It was during the same month that Life Insurance Association of Malaysia announced extension of additional relief measures for policyholders, following the coronavirus pandemic.

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Nigerian President Muhammadu Buhari told the media, “In the circumstances, I would like to appeal to protesters to note and take advantage of the various well-thought-out initiatives of this administration designed to make their lives better and more meaningful and resist the temptation of being used by some subversive elements to cause chaos with the aim of truncating our nascent democracy. For you to do otherwise will amount to undermining national security and the law and order situation. Under no circumstances will this be tolerated.” 

Earlier this week, AM Best published a report which found that the country’s oil and gas reserves and the country at large have the potential to further develop the insurance industry. On the downside, the country’s insurance penetration which also includes a market gross written premium as a percentage of gross domestic product was demonstrated as extremely low. This in turn highlights that there are long-growth opportunities for the market.

More recently, it was reported that there will be no insurance cover for businesses that have been heavily interrupted by the pandemic. It was during this period that the industry saw an increase in the use of digitalisation. This development in turn has also catalysed cyber risk for the industry.

The post Nigerian insurers prepare for claims; face cyber risks appeared first on International Finance.

Huw Evans, director-general of  Association of British Insurers told the media, “There are winners and losers in the way the market works currently, with those who switch insurance providers every year often ending up with lower prices. The FCA has confirmed that insurers have not made excessive profits.” 

The ban is in fact expected to stop automatic renewal, according to the regulator. The reason for the ban is because car and home insurance markets are not beneficial for customers. It is reported that consumer group Which? was open to the new rules introduced by the authority. 

In fact, insurers and brokers have already started to address the issue associated with price differences between new and existing customers in the industry. It is reported that industry has observed more than 8.5 million ‘pricing interventions’ in home and motor insurance worth £641 million. However, several insurance companies across the country will begin to adhere to the rules introduced by the Financial Conduct Authority. 

The post UK regulator to impose ban on insurance companies due to pricing issues appeared first on International Finance.

Understanding the insurance technology landscape

There are a multiplicity of factors that can prevent any business from being able to offer 100% reliability, and in our contemporary landscape, many of these factors are rooted in technology. Technology is evolving at a rapid pace, and organisations are under a huge amount of immense pressure to keep up in an effort to provide their customers with excellent service, while ensuring their employees have the right technology to perform tasks. As users become more tech-literate, and as technology evolves in the consumer sphere, there is an expectation that they will receive a cutting-edge experience from business technology that reflects the service they receive from their own devices. A large part of this is that people want to be able to engage with new technologies and clear any technological boundaries without any involvement from IT. This is called self-service.

Another issue that could hugely affect the reliability of any business is the ever-increasing threat of cybercrime—an issue that is evolving at the same pace as technology, if not faster. Recent findings from the UK’s Office of National Statistics (ONS) found that despite an overall decrease in fraud and computer misuse in 2017, incidents involving malware against businesses have increased. 56% of fraud incidents in 2017 were cyber related, with 3.2 million fraud incidents being reported in the UK alone. Business cybercrime as a whole in the UK went up 63% in 2017. The insurance industry is one of the many verticals in direct contact with cyberattacks, particularly while embracing digital channels. Deloitte has identified that insurers possessing large amounts of personal information about their customers, such as credit card and payment data is one specific reason for the increasing number of attacks.

OneFamily: Using Modernisation to Ensure Reliable Service Customers Trust

OneFamily is one of UK’s largest modern mutual insurers, serving over two million UK customers (10% of UK families) with financial services products, including life insurance, savings, mortgages, bonds and ISAs. There are 550 end-user devices within the organisation, ranging from desktops to laptops to mobile devices, which are running on a mixture of Windows, iOS and Android operating systems. All in all, this makes for a complicated environment for OneFamily to manage, and keep secure against cyberattacks.

As businesses are moving further into the digital age, the IT department’s time is increasingly in demand and staff members are overstretched. Organisations need to do everything they can to optimise functionality. Previously, OneFamily was supporting users and devices through an in-house IT service management system, however as they grew, the number of devices routing queries for assistance was becoming a congestion point. With a rapid increase of IT service desk, the service management system has quickly become a major bottleneck on productivity.

Embracing the opportunity for change and modernisation to cope with dynamically changing infrastructure, the IT team explored the option of a solution with fully featured integrated IT systems management. When operational, this system would offer OneFamily a complete IT service desk management, endpoint (device) management, patching, reporting, and ongoing change management. This meant that they would be able to cope and grow with the rapidly evolving technological landscape, while being able to identify security vulnerabilities in the system to defend against cyberthreat.

Another part of OneFamily’s digital transformation strategy is they wanted to facilitate self-service IT for their users. This hinged on the proposed new system having built-in intelligence to recognise and route users’ queries to the appropriate resource within IT. Having used other Ivanti software solutions within the estate, the team commenced evaluation of Ivanti’s IT Service Management capabilities for change and problem management, alongside patch and software management for full endpoint management.

OneFamily concluded its stress testing and opted to install the solution from Ivanti in a phased, three-month rollout. Four years into adoption, the IT team remains firmly in the driver’s seat with users accessing Ivanti’s IT Service Management capabilities for requests and service incident updates. Users happily self-serve, creating incidents and adding extra information fields when prompted. Ivanti’s IT Service Management solution then automatically classifies what level of service is required and then categorises each request into different issue categories to ensure they can be handled quickly and efficiently. The solution both empowers the user and helps to streamline IT.

Patch management was another notable achievement in the solution module rollout. OneFamily needed a simple, dynamic process to manage ongoing updates required for applications and devices. Using Ivanti’s Unified Endpoint Management capabilities, the IT team was first able to “discover” all of the endpoint devices in usage. Then, OneFamily could locate and identify which endpoints required patch updates and automatically install and run them. By continuing with patch management on an ongoing basis, OneFamily are is able to keep track of vulnerabilities and secure them quickly, thus protecting the organisation against attack.

OneFamily used digital transformation to their advantage, to both allow users to enjoy a cutting-edge technology experience and to defend against the evolving cybercrime threat. These results all fit within an insurer’s wider responsibility of reliability for their customers.

The post One Family wants to secure the insurance landscape—and create a cutting-edge experience appeared first on International Finance.