U.S. Life Insurance Industry NAIC Class 2 Bond Exposure
Life Insurers significantly increased their holdings of NAIC Class 2 bonds (bonds with BBB/Baa level public rating agency ratings) in the years since the financial crisis of 2008-2009
U.S. Life Insurance Industry Structured Security Exposure
In earlier client releases this spring, ALIRT detailed life insurance industry exposure to NAIC Class 2 (BBB rated) bonds, Below Investment Grade (BIG) bonds, and Mortgage Loans. In this release, we explore the life insurance industry’s exposure to mortgage-backed and asset-backed securities, which include the following:
U.S. Life Insurance Industry Below Investment Grade Bond Exposure
Below Investment Grade (BIG) bonds consist of all bonds rated BB+/Ba1 or lower. In the statutory financial statement, there are four different “Classes” of BIG bonds (and their S&P ratings):
Business Interruption Coverage Disputes – An Update
As economic deterioration caused by the Coronavirus crisis accelerates, the issue of business interruption (BI) coverage has come to the forefront. Some impacted businesses are beginning to seek compensation from their BI insurance policies, while insurers have largely argued that coverage under the current conditions does not apply. ALIRT has received many questions from clients seeking guidance on how the resolution of this issue could potentially impact the financial standing of U.S. property & casualty insurers, many of which write property insurance coverages.
U.S. Life Insurance Industry Mortgage Loan Exposure
Mortgage loans have long been an important asset class for life insurers. These assets involve the insurer making a loan directly to a real estate developer or other property owner, rather than via less direct methods of investing in commercial real estate such as commercial mortgage-backed securities (CMBS), real estate investment trusts (REITs), joint venture real estate assets, or in the debt securities of real estate related firms.
State insurance Department Actions on Premium Forbearance – Update
ALIRT has received a number of queries regarding premium forbearance actions taken by insurance companies and state insurance regulators during the current Coronavirus crisis. These calls are driven by insured’s questions/requests as well as by broker concerns around the impact any temporary forbearance might have on the financial performance of insurers.
Prudential plc Announces Plans to IPO (or Sell?) Jackson National
Prudential Plc (PRUplc) announced yesterday that it is preparing for a partial Initial Public Offering (“IPO”) of its U.S. business (collectively referred to as “Jackson”), which is dominated by Jackson National Life Insurance Company (JNL) and Jackson National Life Insurance Company of New York (JNNY).
Regarding The Timing of Insurer Financial Updates
Given the upheaval in the economy and capital markets over the past several weeks, driven by the austere measures taken to counteract the global pandemic, ALIRT has been receiving questions regarding the frequency of new financial updates.
Potential Impacts of Capital Market Upheaval On Property & Casualty Insurers
The recent volatility in interest rates and equity markets attendant upon the spread of the novel coronavirus over the past three weeks marks a decisive shift in operating conditions versus those of the last several years. The Year End 2019 ALIRT Scores and reports (being compiled at present) do not include any impacts from the current market deterioration which all occurred in the first quarter. The March 31, 2020 quarterly statutory financial statements, which would reflect the impact of the current volatility, if sustained, will be filed on May 15, 2020, with ALIRT scores and reports available a few weeks thereafter.
Potential Impacts of Capital Market Upheaval On Medical Health Insurers
The recent volatility in interest rates and equity markets attendant upon the spread of the novel coronavirus over the past three weeks marks a decisive shift in operating conditions versus those of the last several years. The Year End 2019 ALIRT Scores and reports (being compiled at present) do not include any impacts from the current market deterioration which all occurred in the first quarter. The March 31, 2020 quarterly statutory financial statements, which would reflect the impact of the current volatility, if sustained, will be filed on May 15, 2020, with ALIRT scores and reports available a few weeks thereafter.