IG CLOs for Insurance Portfolios

Ruolin Wang
Director, Insurance Solutions

Bo Trant
Client Portfolio Manager, Global CLOs

Evolving regulation, attractive spreads and capital efficiency are strengthening the case for insurers to consider investing in IG CLOs. In this article, we set out three potential use cases for IG CLO tranches in insurance portfolios.

Regulatory change is reshaping the investment landscape for insurers across the globe. In Europe and the U.S., recent, targeted regulatory developments are set to make senior investment grade (IG) CLO tranches more capital efficient for insurers. In Asia Pacific, regulatory change has generally been broader in scope, reflecting the introduction of risk-based capital regimes across a number of jurisdictions. Overall, these developments have helped position IG CLOs as a capital-efficient asset class for insurers.

At the same time, the CLO market is undergoing a broader change in its investor base. For much of the market’s more than 30-year history, CLOs were primarily held by institutional investors, including banks, insurers and pension plans. Over the past several years, however, retail adoption has accelerated as investors have become more familiar with the asset class, its historical performance and its robust structural protections. This trend has been supported by the proliferation of CLO-focused ETFs, which have grown to more than $60 billion in assets¹, expanding access to the asset class and increasing investor awareness.

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1. Source BofA. As of October 9, 2026

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