Apollo’s in-house insurer, Athene, has sparked criticism over potential conflicts of interest by highlighting that rival insurers affiliated with private equity firms hold larger proportions of related party assets.
Athene’s recent investor filing shows it holds 12% of assets in related party investments, lower than competitors such as KKR’s Global Atlantic at 22%, Brookfield’s American National Insurance at 30%, Blackstone’s Everlake at 35%, and Security Benefit Life at 43%, owned by Todd Boehly’s holding company.
Using year-end 2024 statutory filings, Athene challenged the narrative of conflicts by pointing to these higher related party investments in rival insurers. However, when calculated on a similar basis as peers, Athene’s related party asset share rises to 18%.
The filing coincided with the conclusion of the National Association of Insurance Commissioners (NAIC) summer meeting, where state regulators scrutinized private equity’s growing role in life insurance through affiliated investments.
The issue centers on regulators’ concerns about potential risks from related party loans and investments, including whether insurers and their policyholders may indirectly subsidize private equity portfolio companies. Affiliated investments carry higher capital charges, impacting insurers’ capital models.
Meanwhile, private equity groups argue that NAIC rules often overstate affiliated assets – for example, by classifying securitized investment-grade debt as related party assets, inflating figures.
Athene used adjusted data “looking through underlying assets” compared with other insurers’ statutory filings. It noted a $40.1 billion increase by 2024, from $22.6 billion in 2023, representing about 30% of new industry-wide affiliated asset growth.
Regulators from states like New York and Virginia voiced concerns about Iowa’s more permissive capital treatment of such assets.
While Athene, Blackstone, and Brookfield declined to comment, the issue signals rising regulatory scrutiny of private equity-insurer ties amidst a booming private credit market increasingly financed by insurance entity investments, raising questions about risk, transparency, and capital adequacy.
