Over the past decade, insurers have increasingly turned to insurance company-owned life insurance (“ICOLI”) and insurance dedicated funds (“IDFs”) to access public and private market strategies with enhanced tax and capital efficiency. This approach has gained traction as carriers navigate a complex portfolio-construction environment shaped by ALM demands, evolving regulation, and tax considerations, all while seeking diversified, long-duration returns. ICOLI’s favorable capital treatment and expanding set of investment options have reinforced its role as a priority balance sheet and portfolio management tool for insurers of all types, especially for allocations to private markets. Reflecting this momentum, industry sources note that hundreds of U.S. insurers hold ICOLI assets, and the market has grown markedly in recent years to an estimated $50 billion in AUM through year-end 2024.
