Earnings season went into full gear last week. But rather than focusing on premium growth or underwriting, buy-side analysts from across Wall Street all posed versions of the same question to executives: how much of your investment portfolio is exposed to software-sector credit, and how comfortable are you with it?
The question appeared across several earnings calls, directed at companies with very different portfolio strategies. The consistency signals that private credit concentration in software lending has become a consensus concern on Wall Street even as every insurer on the receiving end characterized its exposure as small, well-managed, and immaterial.
Every insurance company executive broke down their exposure to make the number look small, emphasized investment-grade quality and enterprise-software focus, and expressed comfort with current positioning.
No executive acknowledged meaningful risk.
Yet the fact that analysts kept probing (from different firms, in different calls, across different weeks) suggests the buy side sees something the sell side has not yet priced.
If every insurer holds between 15 basis points and 1.5 percent and considers it immaterial, the industry-wide aggregate may tell a different story.
