Why Private Equity Is Buying Insurance Companies, Explained

Over the past decade, some of the largest names in private equity — Apollo, KKR, Blackstone, Brookfield, Carlyle — have quietly become some of the largest names in insurance. They have acquired annuity writers, reinsured billions in life policies, and taken over the investment portfolios of carriers most people have never heard of. To an outsider it looks strange. Buyout firms are supposed to buy software companies and industrial businesses, flip them, and move on. Why would they want a life insurer?

The short answer is that they aren't really buying insurance. They're buying money — a very particular kind of money that is hard to find anywhere else.

The short version

Private equity firms buy life and annuity insurers to get access to permanent capital: large, long-dated pools of policyholder money that they can invest for years without having to give it back on a fixed schedule. They earn on the spread between what those assets yield and what they've promised policyholders, and they earn management fees for running the portfolio. Do that at scale and you have turned a sleepy balance sheet into an engine that funds a private-credit business. By McKinsey's estimate, private investors already own more than $900 billion of life and annuity assets across North America and Western Europe, and, once pending deals close, will control roughly 12% of U.S. life and annuity assets — around $620 billion.

The rest of this piece explains how that actually works.

What they're really after: float

A life insurer or annuity provider collects premiums today and pays claims far in the future — sometimes decades out. In between, it holds a large pile of assets to back those promises. That pile is the "float."

Warren Buffett built Berkshire Hathaway on this insight, and private equity has arrived at the same conclusion. Insurance liabilities are, from an investor's point of view, unusually good funding. They are long-dated, they are sticky, and — unlike a typical PE fund — they don't come with a clock forcing you to return capital to investors in seven to ten years. McKinsey calls this "permanent capital," and it is the single biggest reason the industry's largest firms have piled in. All five of the biggest PE managers now hold life insurance assets representing somewhere between 15% and 50% of their total assets under management.

For a firm whose whole business is putting capital to work, a source of capital that never demands to be repaid on schedule is close to ideal.

The spread business, in plain terms

Here's the core economics. An annuity provider might promise policyholders around 3–4% on their money. If the insurer can invest that money and earn, say, 5–6%, the difference — the spread — is profit. It sounds modest, but on tens of billions of dollars of assets, a spread of a couple hundred basis points is enormous.

Private equity's edge is on the asset side. These firms are, at their core, credit and asset-management shops, and they believe they can squeeze more yield out of an insurer's portfolio than a traditional carrier would — by shifting into private credit, structured products, and other less-liquid, higher-yielding assets they originate themselves. The data backs the claim, at least on returns: PE-owned insurers have generated roughly 62 basis points of additional investment yield versus the industry average, per McKinsey. Widen the spread, and the entire enterprise becomes more valuable.

Why insurance supercharges an asset manager

There's a second layer that's easy to miss, and it's arguably the real prize.

When a PE firm owns or partners with an insurer, it typically manages that insurer's general account and collects a fee for doing so. Overnight, a firm can add tens of billions of dollars of assets under management — the metric public markets reward most — without raising a single new fund. As McKinsey puts it, acquiring a life book is a far faster route to scale than launching several credit funds one at a time.

That's why this trend and the explosion of private credit are the same story told from two ends. Insurers need somewhere to invest their float at attractive yields; private-credit platforms need long-term, patient capital to lend out. Owning the insurer connects the two inside one house. The firm originates the loans, places them in the insurer's portfolio, earns the spread, and collects a management fee along the way. Run well, the strategy targets internal rates of return of roughly 10–14%.

Who's doing it — the deals that defined the trend

This isn't theoretical. A handful of landmark transactions built the playbook:

Apollo and Athene. Apollo completed its all-stock merger with the annuity giant Athene in early 2022, fully fusing an asset manager with a life insurer. It remains the template every rival has studied.

KKR and Global Atlantic. KKR took a majority stake in Global Atlantic in 2021, then bought the remaining 37% in early 2024 for about $2.7 billion, taking full ownership of one of the largest annuity and life platforms.

Brookfield and American Equity (AEL). Brookfield's reinsurance arm acquired American Equity Investment Life, folding another major annuity writer into an alternative-asset manager.

Carlyle and Fortitude Re. Carlyle anchors Fortitude Re, a Bermuda-based reinsurer built to absorb legacy life and annuity blocks.

Blackstone. Rather than buying a carrier outright, Blackstone built vast insurance asset-management mandates — running money for insurers including Corebridge and Resolution Life — reaching the same destination by a different road.

The direction is unmistakable: the line between "asset manager" and "insurer" is dissolving.

What it means for policyholders

For most policyholders, the day-to-day experience doesn't change. The annuity still pays, the policy still stands. The debate is about risk.

Supporters argue PE ownership brings sharper investment management, more capital, and better returns to businesses that traditional insurers had been neglecting or exiting. Critics counter that the same firms are pushing insurer portfolios into more complex, less-liquid, and more opaque assets — and doing it through affiliated entities and offshore reinsurance structures that make the true risk harder to see. Both things can be true at once, which is exactly why regulators have stepped in.

The regulatory pushback

U.S. regulators have moved from watching to acting. In 2022 the National Association of Insurance Commissioners (NAIC) published a formal list of "Regulatory Considerations Applicable to Private Equity–Owned Insurers," flagging the growth of structured securities like CLOs and CFOs, the opacity of related-party asset deals, risk-based-capital arbitrage, conflicts of interest inside investment-management agreements, and the heavy use of offshore, asset-intensive reinsurance.

Since then, the concrete rules have followed in steady succession:

2024: a 45% risk-based-capital charge on the residual tranches of structured securities.

January 2025: a new "principles-based bond definition" tightening what insurers can count as a bond for statutory purposes.

August 2025: Actuarial Guideline 55, requiring insurers to stress-test the collectibility of their reinsurance.

2026: NAIC-built modeling for CLOs, stripping them of their "filing-exempt" shortcut.

Offshore reinsurance is the other front. A large share of these liabilities has been ceded to Bermuda, whose life-reinsurance market the U.S. Treasury and the NAIC have both put under the microscope amid concerns about capital standards and transparency. Expect this to be the defining regulatory story of the next few years.

The bottom line

Private equity's move into insurance isn't a fad, and it isn't really about insurance. It's about capturing permanent capital and wiring it into a private-credit machine that traditional insurers were never built to run. The economics — spread income plus fee income, at scale — are genuinely powerful, and the returns so far support the thesis.

The open question is the one regulators are now asking out loud: whether the risk that comes with higher yields is being priced, disclosed, and reserved for honestly. How that question gets answered will shape not just the insurers, but the retirement savings sitting inside them.

Frequently asked questions

Why do private equity firms want to own insurance companies?

For permanent capital. Life and annuity insurers hold large, long-dated pools of policyholder money that a firm can invest for years without a fixed repayment schedule. The firm earns the spread between investment yield and what it owes policyholders, plus management fees for running the portfolio.

How much of the insurance industry does private equity own?

By McKinsey's estimate, private investors hold more than $900 billion of life and annuity assets across North America and Western Europe, and are on track to control roughly 12% of U.S. life and annuity assets — about $620 billion — once pending deals close. PE-linked insurers already write more than a third of U.S. indexed-annuity premiums.

What is "float" in insurance?

Float is the pool of premium money an insurer holds between collecting premiums and paying claims. Because life and annuity claims can be decades away, that float can be invested for a long time — which is precisely what makes it attractive to investors.

Is my annuity safe if a private equity firm owns the insurer?

The policy obligations don't change simply because ownership does, and state guaranty associations still stand behind covered policies. The concern regulators have raised is about what the insurer invests in — more complex, less-liquid, and offshore-reinsured assets — not about whether the company is currently paying claims. It's a reason to read the fine print, not to panic.

Which private equity firms own insurance companies?

The most prominent include Apollo (Athene), KKR (Global Atlantic), Brookfield (American Equity), and Carlyle (Fortitude Re), alongside Blackstone, which manages large insurance portfolios rather than owning a carrier outright.

Owning Risk is independent insurance-industry intelligence. This is analysis, not investment advice.