Key takeaways
Insurance LPs republish the manager's data, they do not just consume it. Every mark flows into their own regulatory filings under auditor scrutiny.
Lead with book yield and duration, not IRR and MOIC. General account allocation is a liability-side decision, not a benchmark-relative one.
Build one core material set calibrated to the insurance LP standard. Bespoke per-LP-type documents create version control failures and signal immaturity.
Identify the capital pool before tailoring anything. The general account and the alternatives sleeve evaluate against different criteria.
The materials problem most private credit firms haven't solved
Most private credit firms competing for insurance capital are pitching it with materials built for pensions and endowments. The misalignment costs allocations, and the cause sits in the framing rather than the polish.
The reader knows insurance capital is the priority. The question is what to do with materials never engineered for the LP type now driving the next fundraise. 62% of insurance CIOs and CFOs are increasing private markets allocations, with private credit identified as a primary driver. The capital is moving. The communication is lagging.
To communicate private credit strategy to insurance LPs effectively, managers have to treat seven surfaces as one repositioning exercise rather than a reporting upgrade:
Regulatory disclosure
Liability matching
Two-audience materials architecture
Rating agency engagement
Duration and rate exposure
General account versus alternatives sleeve
Mark methodology
These are not seven discrete tasks; they are one architectural shift with seven visible surfaces, and the shift is the recognition that the insurance LP reads materials differently from every other institutional investor the manager has fundraised from.
Regulatory capital is the lens, not a footnote
For an insurance LP, the manager's fund is a position on the LP's balance sheet. That position has to fit into a Solvency II SCR calculation, an NAIC RBC filing, or the Bermuda BSCR depending on domicile.
The LP is asking for a data feed that supports its own regulatory filing under its own auditor's signoff. Generic regulatory capital transparency will not satisfy the request.
What each framework requires from the manager:
Solvency II. The prudent person principle requires lookthrough at position level. Without credit quality, modified duration, and structural treatment data, the LP cannot apply the spread risk sub-module to a fund position. A manager delivering fund-level returns without lookthrough has disabled the LP's SCR calculation. STS versus non-STS securitization classification carries an outsized capital impact. Any structured exposure inside the portfolio has to be classified in disclosure, not left for the LP to reconstruct.
NAIC. The principles-based bond definition under SSAP No. 26R and No. 43R, effective January 1, 2025, governs whether an instrument receives bond-type capital treatment or the heavier equity-type charge. The August 2024 SVO discretion to challenge filing-exempt status when the assigned rating differs from the SVO's assessment by three or more notches means the rating alone no longer settles RBC treatment. The manager's documentation of the underlying instrument has to survive examination.
Bermuda BSCR. The BMA's January 2025 prudent person principle guidance prohibits blind reliance on ratings. The insurer is required to perform its own credit assessment. Disclosure has to support independent analysis rather than presume the rating settles the question. This matters specifically for the Bermuda-domiciled life and annuity reinsurance segment.
The implication for materials is direct. The regulatory disclosure section sits near the front of the deck, not the back. The data layer that supports it is structurally separate from the standard quarterly report.
A manager treating regulatory data as a service nicety has not yet absorbed what insurance company capital requires.
Liability matching is the language insurance LPs evaluate in
Insurance LP allocation to private credit is a liability-side decision dressed as an asset-side allocation. The general account is buying a yield and duration profile against a defined liability book, not a return profile against a benchmark.
The IRR-and-MOIC frame that lands with pension and endowment LPs obscures the question the insurance LP is actually asking. Annuity liabilities spanning ten to thirty years drive the asset-side mandate for long-dated capital, which is the structural reason insurance capital has expanded into private credit.
The vocabulary that has to surface in the manager's materials:
Book yield and net investment yield. What the asset contributes to the general account on a statutory accounting basis. Determines spread to the liability discount rate.
Spread to liability. The gap between asset yield and liability discount rate that drives statutory profit.
Duration and convexity matched against the liability book. Convexity matters because liabilities with embedded options carry instability that asset-side hedging cannot fully absorb. Many new insurance contracts have durations exceeding 70 years, with open block durations approaching or exceeding 20 years. Cash flow matching and asset-liability matching address different problems and coexist as ALM practices.
Run-off versus reinvestment. And surplus capital versus general account capital. Different pools, different evaluation criteria.
SMA versus commingled fund. Separately managed accounts dominate general account allocation. Position-level customization for ALM and capital optimization is not optional.
The failure mode is direct. A pitch leading with vintage performance, manager edge, and benchmark-relative returns to a general account team reveals the manager has not understood which capital pool is on the other side of the conversation.
Insurance-affiliated lenders run 75 to 150 basis points below PE-backed direct lenders for comparable credit quality. The general account team knows this. A pitch that does not engage with the cost-of-capital differential cedes the conversation before it begins.
The repositioning instruction is concrete:
Book yield, NIY contribution, spread to liability discount rate, and duration profile lead the materials.
IRR, MOIC, and DPI become supporting context.
This is the single largest framing change managers built for pensions and endowments have to make.
Build one materials set that satisfies the harder audience
Insurance LPs use fund data for regulatory capital, accounting, and ALM. Traditional institutional investors use the same data for relative manager evaluation. Materials have to satisfy both without producing per-LP-type bespoke documents.
There are three structural reasons why bespoke materials fail:
1. Version control. Insurance LPs republish manager data in their own regulatory filings under their own auditor scrutiny. Different numbers across LP versions surface in due diligence and create credibility problems that are hard to recover from.
2. Operational scale. Per-LP-type customization multiplies geometrically as the LP base grows. The manager either invests in industrial-scale infrastructure or watches investor materials quality degrade as the LP base institutionalizes.
3. Signaling. Sophisticated insurance LPs read bespoke materials as evidence of immaturity, and institutionalized infrastructure as evidence of readiness. The signal matters more than the operational difference at the institutionalization threshold.
The institutional answer is one set of core materials calibrated to the maximum-disclosure LP type, the insurance LP, with structured supplements for LPs that need additional context.
The architecture decisions that distinguish institutional-grade materials:
A designated regulatory disclosure section near the front of the deck rather than buried in the appendix. Signals that insurance capital is built for, not retrofitted to.
An ILPA Reporting Template v2.0 quarterly baseline with insurance-specific supplements at position level. Values must reconcile across audited financial statements, PCAPs, and the LPA.
An expanded ILPA DDQ that adds insurance-specific subsections covering regulatory treatment, valuation policy granularity, rating agency engagement, and ALM characteristics. The expansion happens inside the standard DDQ, not in a parallel insurance version.
The signal the architecture sends is exactly what insurance LPs are checking for. The manager has institutionalized the infrastructure rather than producing a custom version under pressure.
Rating engagement and duration are the two technical disclosures insurance LPs scrutinize
Rating engagement determines the LP's regulatory capital factor. Duration disclosure determines whether the LP can use the position for ALM.
Both have specific failure modes that distinguish insurance-aware materials from generic institutional materials. Both belong in the deck at a level of detail traditional alternatives LPs do not consume. Both are about how the manager communicates against the LP's regulatory and ALM framework rather than against the manager's own narrative preferences.
Rating engagement is now a documentation requirement
The rated feeder vehicles structure has become the dominant access mechanism for insurance LPs because debt receives more favorable RBC treatment than equity.
What the IR materials have to address:
Rating methodology. Moody's, S&P, Fitch, KBRA, and DBRS Morningstar are the principal CRPs in this space. KBRA has built a particularly strong position in private credit and rated note structures.
Credit enhancement structure. Subordination, overcollateralization, reserve accounts, structural triggers.
Surveillance mechanism.
The relationship between the agency rating and NAIC designation under the principles-based bond definition.
Current NAIC scrutiny means the rating alone no longer settles regulatory treatment:
August 2024 SVO challenge discretion when the assigned rating differs from the SVO's assessment by three or more notches.
45% RBC charge on first-loss tranches of asset-backed securities, adopted in 2023 and effective for year-end 2024 RBC filings.
SSAP No. 26R principles-based bond definition effective January 1, 2025.
The manager has to communicate why the rating is durable under SVO examination, not just that it exists. The DDQ should anticipate the LP's rating analyst questions and prepare the documentation in advance rather than producing it on request.
Floating-rate exposure does not eliminate interest rate risk
A pitch that says floating-rate private credit benefits from rising rates is correct for the asset's coupon and wrong for the LP. The LP's liability discount rate is fixed. Surplus deteriorates as rates rise because the LP's other fixed-rate assets lose mark value while the liability discount rate is slow to follow.
What the materials have to surface:
Effective duration including prepayment optionality
Stated maturity separated from expected life, with the prepayment assumption transparent and disclosed
Spread duration distinguished from interest-rate duration
Rate scenarios modeled against the LP's liability discount rate, not only against SOFR
Weighted average life not presented as if it were duration, which is a category error in long-duration ALM
Insurance investment teams cover six standard topics in the first conversation:
Effective duration including prepayment
Expected life under stressed scenarios
Spread duration versus interest-rate duration
Interaction with the LP's liability discount rate
Convexity contribution
Behavior under parallel and non-parallel rate shifts
The materials have to answer all six in the first meeting, not in a follow-up.
Identify the capital pool before tailoring anything
The same insurance group can have both a general account and an alternatives sleeve. Conversations, materials, and people have to work in both registers without contradiction.
The general account buys a yield and duration profile against a liability book under regulatory capital constraints. The alternatives sleeve buys alternatives exposure against a return benchmark under traditional alternatives evaluation criteria.
General account | Alternatives sleeve | |
Buys | Yield and duration profile against a liability book | Alternatives exposure against a return benchmark |
Constraint | Regulatory capital | Traditional alternatives evaluation criteria |
Evaluates on | Book yield contribution, capital efficiency, ALM fit | IRR, MOIC, vintage diversification, manager edge |
Reporting line | Investment office or strategic asset manager partner | Holding company or surplus level |
The publicly known general account templates ground the institutional context:
Apollo for Athene. 95% investment-grade composition, base fee plus sub-allocation fees, no performance fees on the vast majority of assets.
Blackstone for Corebridge, Fidelity & Guaranty, and L&G. Third-party SMA model managing $237 billion in third-party insurance assets as of March 31, 2025.
KKR for Global Atlantic and Ares for Aspida operate variants of the same model.
The AUM growth attributable to insurance integration is structural: Blackstone added approximately $260 billion in AUM following its insurance deals, Apollo grew by more than $250 billion in the three years after the Athene merger, Ares grew by more than $300 billion following the founding of Aspida, and Carlyle grew by approximately $200 billion following the Fortitude Re deal.
The operational protocol:
Identify the capital pool early through specific questions about regulatory framework, accounting basis, and evaluation criteria.
Calibrate emphasis based on the answer.
Use consistent fund data across both conversations, because different numbers across pools surface in cross-team comparisons within the same insurance group and damage credibility immediately.
Knowing which pool the conversation is about before tailoring is the institutional signal. Pitching the wrong register reveals an absence of institutional memory that is hard to walk back.
Mark methodology is now an audit-supportable practice
Insurance LPs republish the manager's marks rather than consuming them internally.
The marks flow into:
Solvency II MVBS
NAIC RBC
Statutory accounting under SAP
IFRS 17 reporting
LP rating agency engagement
Pension LPs republish into ASC 715 funded status reporting and asset allocation policy compliance. Both groups file the manager's marks under their own auditor and regulator scrutiny.
A mark the manager cannot defend is a mark the LP cannot publish. Methodology that drifts between quarters without explanation gets flagged by the LP's auditor. A valuation policy without an independent third-party provider reads as insufficient rigor to the rating agency analyst reviewing it.
Houlihan Lokey, Lincoln International, Duff & Phelps/Kroll, and Murray Devine are the four firms most insurance and pension LPs recognize as defensible valuation providers. Naming one of them in the policy clears the bar without further explanation. Naming none invites challenge.
Alternatives LPs use marks to compare managers against each other, so consistency matters more than absolute defensibility. Insurance and pension LPs use marks for regulatory filings and accounting statements, where defensibility under examination matters more than relative consistency. A manager calibrated only to the alternatives standard produces marks that are internally consistent and externally vulnerable.
The communication architecture:
A valuation policy section near the front of the materials, covering the policy itself, the independent valuation committee that signs off on marks, and the third-party provider the manager engages.
A clear statement of where each position sits in the ASC 820 or IFRS 13 fair value hierarchy. Private credit positions are almost always Level 3, meaning the valuation rests on the manager's models rather than observable market prices. Stating this explicitly is the institutional baseline, not a weakness signal.
Methodology disclosed by asset type with assumptions visible: discounted cash flow for performing direct loans (discount rate and projected cash flows shown), market multiples where comparable transactions exist, recovery analysis for stressed credits with the recovery assumption stated.
Calibration to known transactions, meaning model output is checked against recent observable data points such as refinancings, secondary trades, or comparable sales, per the AICPA Accounting and Valuation Guide.
An audit-trail record of any methodology change, including the reason and the impact on reported NAV.
A defined process for handling LP auditor requests to validate a methodology. The answer cannot be improvised at the moment.
Bottom line: Insurance LPs republish, the disclosure burden inverts
The insurance LP is a republisher of the manager's data, not the end consumer.
The manager's data does not stop at the insurance LP. It flows through the LP and into the LP's own regulatory filings, statutory accounting statements, GAAP and IFRS fair value disclosures, and rating agency submissions. Every one of those filings sits under the LP's own auditor and regulator.
That is what separates insurance capital from pension and endowment capital. And it is why the seven shifts above are not seven different fixes. They are one consequence of a single change: the audience for the manager's data is now everyone who examines the LP's filings, not just the LP itself.
That changes the test the manager has to pass. The right question is no longer whether the deck reads well. It is whether each number in it can survive the LP's auditor, sit inside a regulatory filing, and hold up under examination by a rating agency analyst.
A manager built for pensions and endowments is preparing materials for the wrong audience. The test that matters is whether the LP can republish the data.
