Dec 1, 2025
How Private Asset-Based Finance Builds Resilient Insurance Portfolios
The Challenge
Insurance portfolios are under mounting pressure.
Returns are compressing. Regulations are tightening. And the obligations to policyholders haven't changed.
“In the last two years, record levels of structured finance issuance were met with equally strong demand,” says Paul Carroll, Managing Director, Private Asset-Based Finance at MetLife Investment Management (MIM). “The supply-demand dynamic meant significant spread compression across all credit products. Meanwhile, fundamentals have remained stable.”
The squeeze has created a math problem: the safest bonds don’t pay enough to hit targets, but insurers can’t compromise on quality or capital efficiency. CIOs need extra spread without moving down the risk ladder.
Enter private ABF — privately negotiated, deals backed by real asset collateral that trade liquidity for more control and transparency over the credit and may deliver additional spread and diversification public markets often can’t match.
The Impact
Private ABF offers a different playbook from other traditional credit investments.
It finances diversified pools of assets — consumer loans, equipment leases, fund finance, residential mortgages — inside bankruptcy-remote vehicles that isolate them from sponsor risk.
The mechanics build on decades of structured finance. “Private deals are directly negotiated with the issuer,” Carroll says. “And because of that, we have greater control over the deal terms and more opportunity for pricing power.”
That control makes a difference. “Public deals are rigid,” adds Carroll. “In private ABF we can do different collateral, tenors, delayed draws—even whole-loan sales.”
The flexibility delivers tangible benefits. As of 3Q 2025, MetLife Investment Management's origination spreads in investment grade private ABF average the high-200 basis point range — often 150 to 200 basis points above comparable public investment grade corporates. Over 90% of the portfolio carried single-A ratings or higher, delivering quality alongside yield.2
The terms matter as much as the pricing. MetLife Investment Management negotiates customized covenants, tighter performance triggers and prepayment protections that broadly syndicated deals don't offer.
The firm works bilaterally or in a small club on nearly every transaction, gaining access to proprietary collateral data public investors never see. “There's access to collateral you don't find in other sectors,” Carroll notes.
The Takeaway
Private ABF is shifting from tactical opportunity to core allocation for insurers managing compressed returns.
The spread advantage should continue. “We think the spread environment will persist,” Carroll says, with the 150 to 200 basis point premium over IG public corporates remaining available for insurers willing to commit capital and accept illiquidity.
The regulatory environment adds complexity — new NAIC initiatives around capital charges, ratings discretion and bond definitions create implementation burdens. Success requires partnership with managers who understand both the asset class and the insurance regulatory framework.
MetLife Investment Management’s deal pipeline is robust, diversified across sectors where the firm has sourcing and underwriting advantages: strategic partnerships with originators, less crowded fund finance segments and alternative structures like loan pool purchases.
MetLife Investment Management looks to leverage its scale and capabilities on behalf of clients, sourcing private ABF opportunities that public markets often can't deliver.
1 InsuranceAUM.com Linked survey of their investment professionals, January 2025.
2 Year-to-date 3Q25 MIM originations. All investments involve risks including the potential for loss of principle and past performance does not guarantee similar future results.
Disclaimer
This material is intended solely for Institutional Investors, Qualified Investors and Professional Investors. This analysis is not intended for distribution with Retail Investors. This document has been prepared by MetLife Investment Management (“MIM”)1 solely for informational purposes and does not constitute a recommendation regarding any investments or the provision of any investment advice, or constitute or form part of any advertisement of, offer for sale or subscription of, solicitation or invitation of any offer or recommendation to purchase or subscribe for any securities or investment advisory services. The views expressed herein are solely those of MIM and do not necessarily reflect, nor are they necessarily consistent with, the views held by, or the forecasts utilized by, the entities within the MetLife enterprise that provide insurance products, annuities and employee benefit programs. The information and opinions presented or contained in this document are provided as of the date it was written. It should be understood that subsequent developments may materially affect the information contained in this document, which none of MIM, its affiliates, advisors or representatives are under an obligation to update, revise or affirm. It is not MIM’s intention to provide, and you may not rely on this document as providing, a recommendation with respect to any particular investment strategy or investment. Affiliates of MIM may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives) of any company mentioned herein. This document may contain forward-looking statements, as well as predictions, projections and forecasts of the economy or economic trends of the markets, which are not necessarily indicative of the future. Any or all forward-looking statements, as well as those included in any other material discussed at the presentation, may turn out to be wrong. All investments involve risks including the potential for loss of principal and past performance does not guarantee similar future results. Property is a specialist sector that may be less liquid and produce more volatile performance than an investment in other investment sectors. The value of capital and income will fluctuate as property values and rental income rise and fall. The valuation of property is generally a matter of the valuers’ opinion rather than fact. The amount raised when a property is sold may be less than the valuation. Furthermore, certain investments in mortgages, real estate or non-publicly traded securities and private debt instruments have a limited number of potential purchasers and sellers. This factor may have the effect of limiting the availability of these investments for purchase and may also limit the ability to sell such investments at their fair market value in response to changes in the economy or the financial markets.
In the U.S. this document is communicated by MetLife Investment Management, LLC (MIM, LLC), a U.S. Securities Exchange Commission registered investment adviser. MIM, LLC is a subsidiary of MetLife, Inc. and part of MetLife Investment Management. Registration with the SEC does not imply a certain level of skill or that the SEC has endorsed the investment advisor.
1. MetLife Investment Management (“MIM”) is MetLife, Inc.’s institutional management business and the marketing name for subsidiaries of MetLife that provide investment management services to MetLife’s general account, separate accounts and/or unaffiliated/ third party investors, including: Metropolitan Life Insurance Company, MetLife Investment Management, LLC, MetLife Investment Management Limited, MetLife Investments Limited, MetLife Investments Asia Limited, MetLife Latin America Asesorias e Inversiones Limitada, MetLife Asset Management Corp. (Japan), and MIM I LLC, MetLife Investment Management Europe Limited and Affirmative Investment Management Partners Limited.