Press Release - JULY 31, 2019
Best’s Special Report: U.S. Insurance Industry’s Structured Securities Holdings Top $1 Trillion
FOR IMMEDIATE RELEASE
OLDWICK - JULY 31, 2019
The new Best’s Special Report, titled, “Insurers’ Structured Securities Holdings Continue to Rise,” states that all three U.S. insurance segments grew their structured securities holdings in 2018, with property/casualty holdings up by 14.3%; life/annuity holdings by 4.1%; and health by 22.2%. Market issuance of structured securities declined marginally in 2018, by 3%, but was up 4.9% in 2017, after rising 11% in 2016 and 16% in 2015. Collateralized loan obligations (CLO) issuance dropped by nearly 5% in 2018 to $280.7 billion, but between 2016 and 2017 had more than doubled. Insurers continue to add to their CLO allocations, with industry holdings climbing consistently each of the last five years, up 28% in 2018 to $82.2 billion. The life/annuity segment holds roughly 80% of industry CLOs, and its holdings increased by 25% in 2018 to approximately $65 billion.
Other report highlights include:
Structured securities can provide bond portfolio diversification, and AM Best views allocations to various types of structured securities as it would many other traditional asset classes, and expects companies to be able to discuss their investments in detail as part of the rating process.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=288181 .
AM Best is a global rating agency and information provider with a unique focus on the insurance industry.