U.S. Life Insurers Could Handle Another 2009: Fitch
February 26, 2019 by Allison Bell
Big U.S. life insurers have deep piles of capital, and they appear to be in a good position to survive a repeat of the 2007-2009 Great Recession.
A team of Fitch Ratings analysts led by Mark Rouck give that assessment in a recent review of the insurers’ finances.
The analysts looked into concerns that the average credit quality of the bonds in life insurers’ has dropped since 2007, and that life insurers have increased the percentage of their assets invested in collateralized loan obligations, or CLOs.
The share of the life insurers’ own bond portfolios invested in bonds rated A or above fell to 61% as of Sept. 30, 2018, from 69% at the end of 2007, and life insurers probably have about 10% of their capital invested in CLOs, analysts said.
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