Podcast Episode 18: A Conversation on Demystifying Portfolio Credit Insurance: A Risk Tool for Private Credit

In this episode, SBAI’s Brian Digney is joined by Ben Gedye and Josh Madeiros from K2 Credit to explore the rising role of portfolio credit insurance as a risk management tool in private credit and debt markets. As traditional banks scale back lending, private asset managers are stepping in — and with that shift comes the need for sophisticated ways to hedge credit risk.

Ben and Josh explain how non-payment insurance works, its historical roots, and its evolving use beyond banks — highlighting how managers can leverage it to improve risk-adjusted returns, facilitate leverage, and reduce concentration risk. The conversation covers structural nuances, underwriting processes, common mistakes, claim settlement mechanics, and how insurers evaluate not just the portfolio, but the asset manager’s governance and transparency.

Key takeaways include:

Portfolio credit insurance is a tailored de-risking strategy, not just a traditional insurance product.

• Successful implementation hinges on strategic, portfolio-wide application, not opportunistic single-risk coverage.
• Asset managers and investors must engage with specialist brokers and underwriters, ensuring products are fit for purpose.
• With today's soft insurance market and increased capacity, now may be a prime time for managers to explore coverage.

Whether you’re a fund manager looking to enhance resilience or an investor assessing risk frameworks, this episode provides a comprehensive, jargon-free guide to a powerful but often overlooked financial tool.

About the SBAI:

We are an active alliance of asset managers and allocators dedicated to responsible practice, partnership, and knowledge. We do this by setting Standards, providing industry guidance, and facilitating collaboration and exchange of ideas through our community of over 250 institutional investors and asset manager signatories responsible for approximately US$ 11tn in assets.

For more information visit https://www.sbai.org/

For more information visit https://www.sbai.org/