May 1 (Reuters) - AIG has pared back its private credit activity amid current market conditions, the insurer's finance chief said on Friday, helping reassure investors and pushing its shares up about 5% in early trading.
Elevated default rates have put big asset managers under sharper scrutiny over their liquidity, as redemptions pick up across the industry. Investors have also grown wary of the private credit market's rapid expansion and its lack of transparency.
Several alternative asset managers
who have a strong footing in such credit markets have seen their shares take the hit in the early months of 2026.
"We've slowed our deployment in this asset class, given market conditions," CFO Keith Walsh said on a post earnings call with analysts.
The insurer posted a sharp rise in quarterly adjusted profit on Thursday, driven by strong underwriting and a steep decline in catastrophe-related losses from a year earlier when the industry was hit by claims from the Los Angeles wildfires.
Walsh also added that AIG holds all direct lending on its balance sheet and through business development companies. BDCs are publicly traded lenders to private companies and a key part of the private credit market.
"Our direct lending exposure is about $1.2 billion, less than 1.5% of the general insurance investment portfolio. It is a diversified portfolio of middle market loans with an average loan size of about $6 million," Walsh said.
The reassurance of the portfolio and (non)deployment helps the under-pressure stock of the insurer, which has seen a year-to-date decline of nearly 13%.
(Reporting by Pritam Biswas in Bengaluru; Editing by Shailesh Kuber)
