American International Group (AIG) said it has curtailed new private credit deployments in response to prevailing market conditions, the insurer's finance chief told analysts on a post-earnings call, a disclosure that appeared to calm investors and coincided with an approximate 5% rise in the company's shares during early trading.
Keith Walsh, AIG's chief financial officer, said the company has "slowed our deployment in this asset class, given market conditions." He reiterated that all direct lending is held either on AIG's balance sheet or through business development companies. Business development companies, or BDCs, are publicly traded lenders to private companies and form an important component of the private credit market.
Walsh provided additional detail on the scale and composition of AIG's exposure, stating: "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."
The company's decision to slow new deployments comes against a backdrop of broader market strains. Elevated default rates have intensified scrutiny of large asset managers' liquidity profiles as investor redemptions increase across the industry. Market participants have also expressed concern about the private credit sector's rapid growth and limited transparency. The early months of 2026 have seen several alternative asset managers with significant positions in private credit experience share price declines.
Separately, AIG reported a sharp increase in quarterly adjusted profit on Thursday. Management attributed the improvement to robust underwriting results and a pronounced drop in catastrophe-related losses versus the comparable quarter a year earlier, when the insurance industry faced claims stemming from the Los Angeles wildfires.
Despite the recent uptick in the stock, AIG's shares remain under pressure year-to-date, having recorded a decline of nearly 13% earlier in the period. The company's stated restraint on private credit deployment and its disclosure of limited direct lending exposure appear to have helped alleviate some investor concerns about the insurer's balance sheet sensitivity to private credit volatility.
Contextual note: The company confirmed its holdings are concentrated in middle market loans and that direct lending represents a small portion of its general insurance investment portfolio.