Apollo CEO Rowan warns of market correction, slams competing insurers

Apollo Global Management Chief Executive Mark Rowan warned investors on Wednesday that his giant asset management company was bracing for a potential market downturn and harshly criticized the “terrible” practices of some rival insurers.

The current strong economic backdrop contributed to Apollo’s strong quarterly report with $1 trillion in assets under management and fee-related revenue, but masks the growing risk of what he calls “off-the-shelf” shocks.

“Everything we have in front of us is actually very powerful,” Rowan said. But “in our opinion, an outcome other than a bystander is much more likely.”

Rowan, who co-founded Apollo in 1990 and oversaw its transformation into an alternative assets and insurance giant, said he is now more concerned about external factors derailing the economy than at any time in his 40 years on Wall Street.

His comments come as the U.S. stock market is trading near record highs, adding to the concerns of financial executives. JP Morgan Chase CEO Jamie Dimon.

Rowan said the probability of an exogenous shock is between 30% and 35%, much higher than normal risk levels.

Rowan said the convergence of forces could destabilize markets, including a “complete geopolitical reset,” potentially inflationary policies through labor and trade restrictions, and a broader cycle of artificial intelligence that reshapes employment and economic growth.

“Almost everything we do, whether intentionally or not, has the potential to cause inflation,” Rowan said, apparently referring to President Donald Trump’s tariff policies and U.S. immigration policy.

“Restricting the supply of goods, restricting the supply of labor, restricting the free movement of goods and labor, probably because there are good reasons to do so, are all inflationary in the short run, even if you don’t see any signs of it happening,” he said.

Regarding AI, Rowan predicted a socio-economic upheaval, saying, “Almost every job will be enhanced or replaced. We will see a complete reversal of blue-collar dominance and white-collar stress.”

He added that corporate and consumer balance sheets remain strong, but government finances are tight.

Rowan said Apollo is currently experiencing strong results, but is preparing for turbulent times ahead.

The company strengthened the credit quality of its fixed-income investments, reduced exposure to riskier sectors such as software, and stockpiled about $40 billion in cash from its insurance business.

“This means that we are investing with capital protection in mind and are here to ensure that if there is a correction, we are here to weather the cycle, and frankly we expect that,” Rowan said.

But Rowan, who transformed Apollo by expanding into insurance in 2009 through Athene, a distributor of pension and retirement products, reserved his sharpest comments for other insurers. The insurance business provides Apollo with a large and stable pool of investment capital. This is similar to the “float” model of insurance that became popular in the United States. Berkshire Hathawayand is now central to that strategy.

“Not everyone in our industry is doing what they’re supposed to be doing. Not everyone is running their business the way we’ve been running our business,” Rowan said. “I’m worried about infection.”

An outbreak would spread stress across the industry, increasing the risk that regulators and central banks would have to intervene to protect insurance and retirement customers.

Rowan did not name specific companies believed to be involved in wrongdoing.

But he suggested some insurers relied on what he called “terrible” practices, such as offshore Cayman Islands structures, complex collateralized lending and aggressive credit assumptions, that could make some balance sheets look healthier than they actually are.

“What we can do is be transparent, strive for higher ratings, build capital and operate for the long term,” Rowan said.