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Life Health > Life Insurance

Life Insurers Report Record Low Commercial Mortgage Delinquency Rate

By Staff Writer

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NU Online News Service, Aug. 20, 12:56 p.m. – The rate of reported delinquencies on commercial mortgage loans held by U.S. life insurers is at the lowest level recorded in 36 years of surveys by the American Council of Life Insurers, Washington.

In spite of the recent economic slowdown, the latest quarterly ACLI survey shows the delinquency rate fell to 0.24% for the quarter ending June 30, edging out the previous record of 0.25% set in December 1999.

Jack Nowakowski, ACLI manager of investment research, attributes the low rate to the more stringent standards life insurers now use when deciding whether to take commercial mortgages.

Life insurers have about $213 billion in outstanding commercial mortgage loans, representing nearly 7% of industry assets. Nine years ago, commercial mortgage loans represented about 17% of industry assets, and mortgage delinquencies were at their highest rate ever — 7.53% on June 30, 1992.

About 85% of life insurers participate in the ACLI quarterly surveys.

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