How Insurers Invest Your Money: What to Know About Private Credit and Long-Term Stability

By: Tyler Bakker
Deputy Chief Investment Officer, Mutual of Omaha

Summary: As attention grows around how insurers invest premium dollars, private credit has emerged as a key topic of interest. Learn what private credit is, why it’s gaining attention, and how disciplined, long-term investment strategies help prioritize policyholder security over higher-risk returns.

Understanding an insurer’s investment approach is an important part of choosing a life insurance or annuity provider. Asset allocation, liquidity and third-party financial strength ratings all offer meaningful insight into a company’s ability to meet its long-term promises to policyholders.

Recently, increased attention has turned to another area of insurer investing: private credit.

As consumers hear more about private credit exposure across financial institutions — including insurance companies — it’s natural to want clarity about how your insurer is positioned, and whether those investments support long-term financial security.

A simple explanation  of private credit — and why people are talking about it

Private credit simply means loans that aren’t traded on public markets like stocks or bonds. Instead, these are private agreements between lenders and borrowers. They’re often customized for specific situations and are usually held for a long time rather than bought and sold frequently. These loans are often privately negotiated and can include unique, customized structures designed to meet a borrower’s specific needs, rather than standardized terms used in public markets.

Over the past decade, some insurers and investment firms used more private credit to try to earn higher returns, especially when interest rates were very low. While these investments can generate additional income, they also come with trade-offs, such as being harder to price accurately and harder to sell quickly if market conditions change.

More recently, higher interest rates and signs that some borrowers may struggle to repay loans have raised new questions. As a result, regulators, investors and consumers are taking a closer look at how much private credit exposure financial institutions have — and whether those investments could limit flexibility during periods of economic uncertainty.

Staying anchored to long-term commitments

From my perspective as Deputy Chief Investment Officer, the renewed focus on private credit reinforces a foundational principle of insurance investing: every investment decision must support our ability to pay claims and deliver on promises to customers — not just today, but decades into the future.

Life insurance and annuities are designed to last for decades. That means investments need to be stable, easy to understand and able to perform through ups and downs in the economy.

At Mutual of Omaha, we’ve remained deliberate and selective in how we approach newer and more complex asset classes. While private credit has grown meaningfully across the industry, Mutual of Omaha has very limited exposure to private credit compared to many other companies in the industry. Instead, we continue to prioritize high-quality, sustainable investments that align closely with long-term liabilities and policyholder needs.

Why selectivity matters

Different investment strategies can look similar when markets are calm, but their differences often show up during times of stress. That’s when a company’s risk management matters most.

That’s why we emphasize balance — seeking attractive long-term returns while carefully managing risk, liquidity and transparency. Our goal isn’t to chase higher returns at any cost, but to ensure financial strength through a wide range of market conditions.

For policyholders, that discipline matters most during times of stress. An insurer’s ability to meet claims and obligations shouldn’t depend on favorable markets or short-term performance.

What insurance shoppers should take away

If you’re seeing headlines about private credit, it’s a good reminder to ask a simple question: How does my insurer invest the premiums I pay?

Understanding an insurer’s investments and financial strength ratings helps provide confidence that its investment strategy matches its long-term promises. Reviewing public disclosures, rating agency reports and management commentary can offer valuable perspective — especially during periods of heightened market focus on riskier or less liquid assets.

At Mutual of Omaha, our investment philosophy remains consistent: prudent risk management, long-term sustainability and an unwavering commitment to policyholders.

Being there for our customers when it matters most — no matter the economic environment — is the standard against which we measure every investment decision we make.

Learn more about Mutual of Omaha’s financial strength and ratings today.

By: Tyler Bakker

Deputy Chief Investment Officer, Mutual of Omaha

Tyler Bakker is responsible for leading investment strategy, portfolio construction, and performance across the company’s general account, while helping guide the overall direction of the Investment Management Organization. In this role, he works closely with senior leadership to drive disciplined execution of asset allocation, risk management, and portfolio optimization, and plays a key role in shaping investment policy and governance.

Bakker joined Mutual of Omaha in 2012 and has held a series of leadership roles across the investment organization. He has deep experience across public and private markets, with a particular focus on aligning investment strategy with the company’s long-term liabilities and capital objectives.

He earned his bachelor’s degree from the University of Nebraska and is a CFA charterholder.

Disclosures:

Annuity guarantees are backed by the claims-paying ability of the issuer.

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

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