Life insurers privately lent out $849 billion, and they’re using your ‘guaranteed’ annuity to help fund those loans If you or your parents bought an annuity to sleep better in retirement, there is a good chance part of that money is now lent to companies you have never heard of, on terms you will never see. The paperwork said “guaranteed,” and you signed where the man pointed. Wall Street’s private lenders spent this year turning away investors who wanted out of their funds.
Life insurers, the companies that sell you annuities, are among the biggest lenders in that same market. The difference is that the fund investors knew they owned private credit. Most annuity owners don’t.
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Start with the people who did ask. On Oct. 2, Blue Owl Credit Income Corp. said investors asked to redeem 16.8% of its shares, or $3.1 billion, in the third quarter. Blue Owl said it would redeem only 5%.
In April, the same fund got requests for 21.9% of its shares and kept redemptions at 5%. Those investors were told no. But at least they got to raise their hands.
One of the biggest pools of money in private credit isn’t a hedge fund. Economists at the Federal Reserve Bank of Chicago found that life insurers’ private loans grew from $386 billion in 2014 to $849 billion in 2024. That is 14% of everything insurers hold, up from 10% a decade earlier.
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