U.S. Life Insurers' Shift to Illiquid Private Assets Accelerates Systemic Risk

Private placements now represent 14% of U.S. life insurers' general account assets, up from 10% in 2014. These fixed-income instruments carry lock-up periods exceeding ten years and minimal secondary liquidity. The shift matches returns when policyholders surrender policies, forcing sales precisely when asset prices are hardest to realise—a structural pattern mirrored in the late 1980s insolvency wave.