Low investment grade debt a staple of EU insurer portfolios

Debt holdings just one notch above junk status make up €642.8 billion of standard formula insurer assets

Credit assets of the lowest investment grade level make up almost one-quarter of all debt held by European Union insurers that do not use their own models to estimate default risks.

Data from the European Insurance and Occupational Pensions Authority (Eiopa) shows that as of end-2018, 23.1% of all sovereign bonds, corporate bonds, structured notes and collateralised securities were allocated to credit quality step (CQS) three, one notch above junk rating. This amounts to €642.8 billion ($711.2

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