Insurance companies, long considered among the most conservative of CRE lenders, have jumped on the recent trend of making riskier loans as they increase lending volume to commercial property owners.

As carriers raise leverage and deepen their exposure to sectors like data centers, they’re taking on more sensitivity to valuation swings as the market braces for turbulence stemming from capital costs that just keep rising.

“It’s a potential real problem,” MRV Associates Managing Principal Mayra Rodriguez Valladares said. “The market sees this, and that's why all of a sudden there's a lot of talk and concern about insurance companies, because not only have they lent to all this real estate, they've also been investing in private equity and in other kinds in private credit, and all kinds of assets to try to make more money.” 

Insurers aren’t alone in taking on more risk in the commercial real estate loans. Across lenders of all types, loan-to-value ratios are up to 65.9% in the first half of 2026, compared to 64.2% in the same period a year earlier. Investor-driven lenders have the highest ratio at 69.5%.

But insurance lenders posted the largest LTV jump of any group this year, up 2.5% to 62.7%, according to MSCI. A surge in private equity acquisition of insurance companies has helped push the companies into newer, sometimes riskier bets, including private credit, according to a study from the Federal Reserve Bank of Chicago.

Blackstone bought Allstate Life Insurance Co. for $2.8B in 2021, followed closely by Brookfield Reinsurance’s purchase of American National for $5.1B. 

More than $75B in insurance M&A deals occurred between Apollo’s 2022 acquisition of the portions of Athene it did not already own and September 2025, Global Finance reported.

Life insurance companies, which hold more than 95% of the insurance industry’s commercial loans, carried $940B in exposure to CRE in 2024, including both commercial mortgages and CMBS loans. Early this year, Moody’s projected that total would reach $960B for 2025. Firm numbers for 2025 aren’t available.

Life insurers’ commercial real estate investments have grown at roughly 2% per year, according to Moody’s.

Insurance companies have always liked lending to commercial real estate, since it tends to be long term and predictable, playing to a more risk-averse strategy but still offering attractive yields. 

“Traditionally, insurance lenders were always the most conservative in terms of their underwriting,” MSCI Head of Real Estate Economics Jim Costello said.

But that is changing, not just through riskier commercial mortgages and CMBS loans but by branching out into investment types. 

At the same time, billions in maturities are approaching. Insurance loans to CRE face $44B in maturities in 2027, $55.5B in 2028 and $57.3B in 2029, according to MSCI.

The increasing volume of loan maturities will be impacted by increasing interest rates, Valladares said.

“The expectation is that rates are still going to go possibly higher or, at the very least, stay where they are,” she said. 

This would mean a borrower might have a higher probability of default now than in January before the Iran war started, for example.

Insurance companies have also increased their investment in private credit debt across the board to $1.2T, and although private credit attached to real estate has largely avoided the wave of defaults that have reached other corners of that market, some have still raised eyebrows.

Following the revelation that two insurance companies owned by Guggenheim Partners CEO Mark Walter had reclassified $20B in investments as affiliated transactions, which are deals with exposure to related parties, Massachusetts Sen. Elizabeth Warren raised concerns over how such investments are overseen.

Warren sent a letter to the National Association of Insurance Commissioners last month asking for information about Walter’s firms and their dealings but also inquiring more broadly about how the association polices the insurance industry’s private credit bets.

“Ultimately, if an insurer fails because of its exposure to the weak valuation and loan underwriting standards that have been well documented in the private credit market, policyholders could bear the consequences — potentially losing benefits they are entitled to despite having paid their premiums,” Warren wrote.

NAIC responded with its own letter, saying it would tighten its assessments of private credit and complex investments by insurance companies in search of a clearer view of risks.

The NAIC also this year decided to review insurance companies’ investments in data centers, a fast-growing target for funds of all kinds.

Last year, roughly 30% of insurance lending to real estate went toward data center projects, according to MSCI, a segment of the market that some analysts have cautioned is growing too quickly, opening lenders up to risk.

Some see this as a moment when insurance lenders have more opportunities, including Matt Salem, KKR partner and head of real estate credit. He said the repricing of many real estate assets offers great opportunities for insurance lenders. 

He said he's seen additional interest in allocation to CRE debt funds and that senior secured CRE debt may emerge as an opportunity particularly relevant to insurance portfolios. 

The challenge will be balancing that opportunity with the increased risks brought on by high interest rates and the resulting pressure on borrowers.

“In the last couple of years, as we've seen in many sectors of commercial real estate, they're struggling,” Valladares. “All of a sudden, the borrowers need to turn around and pay the insurance company more than they thought years ago.”