US insurers built up holdings of shaky bank loans in 2019
Non-investment grade loans make up 80% of insurer loan exposures
Total bank loans held by US insurers hit $63 billion at end-2019, an increase of 18% on the year prior. Four-fifths of these were junk rated, with 11% assigned a CCC credit rating, data from the National Association of Insurance Commissioners (NAIC) shows.
The percentage of loans with a BB or B credit rating climbed to 68% at end-2019, up from 64% the year prior. Over three-quarters of bank loans were held by life insurers, with the very largest – those with over $10 billion in assets –
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