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Stronger Credit Quality Is Helping U.S. Life Insurers To Withstand Commercial Real Estate Losses Mar 11
Standard & Poors, March 2011
Abstract
As the pressure on commercial real estate (CRE) began to mount in 2008, U.S. life insurers increased their focus on their holdings of these investments. The industry's exposure to CRE--which includes commercial mortgage-backed securities (CMBS) and commercial mortgage loans (CML)--is significant, accounting for about 18% of total invested assets. (See the related CreditMatters TV segment, 'How U.S. Life Insurance Companies' Commercial Real Estate Portfolios Weathered The Economic Downturn,' dated April 11, 2011.) What's helped life insurers to withstand the downturn in CRE is that they've maintained adequate capitalization levels as they bought generally higher-quality CMBS and their CML investments performed relatively well. Many insurers also have limited any significant new investments in CRE over the past few years. The aggregate...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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