U.S. Life Insurers Doubling Down on Hard-to-Sell Assets

U.S. life insurers now hold 14% of their investments in private placements—loans and bonds locked up for over a decade with almost no resale market—up from 10% a decade ago. When policyholders withdraw cash, insurers must sell. That forces them to dump these illiquid assets precisely when prices are lowest. History warns: this pattern preceded the insolvencies of the late 1980s.