The concept is not new: Warren Buffett’s Berkshire Hathaway (BRKa.N) has used its insurance premiums to help fund everything from railways to cowboy-boot makers.
The prospect of insurance companies buying risky loans or private equity investments has raised eyebrows.
Many private credit assets, for example, rely on so-called private letter ratings based on confidential data.
Given the private nature of private credit, it’s hard to see from the outside how big these risks are, or where they lurk.
Besides, even if the share of life insurance assets that are mis-rated or undercapitalized is tiny, smaller insurers could carry more concentrated risk.
Persons:
Blackstone, Warren Buffett’s Berkshire Hathaway, Fitch, Kroll, Egan, Jones, DBRS Morningstar, Banks, SVB, Jonathan Guilford, Neil Unmack, Peter Thal Larsen, Oliver Taslic
Organizations:
Reuters, Apollo Global Management, KKR, Global Atlantic, Investments, National Association of Insurance, England’s Everton FC, Rivals, Reuters Graphics Reuters, Federal Reserve, Federal Deposit Insurance Corp, Athene, P Global, Insurance, SVB, Thomson
Locations:
Global, Delaware , New York, Iowa, New York, London