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June 06, 2017 at 01:22 PM
Insurance companies have increased their commercial mortgage allocations while maintaining a record of comparatively low net losses.
That’s among the headline findings of the CREFC/Trepp Insurance Company Investment Performance Survey for the second half of 2016, released Monday by the CRE Finance Council and Trepp LLC.
(Related: Insurers Boosting Cash As Credit Worries Build, BlackRock says)
At the year end of last year, insurers’ commercial mortgage holdings averaged 11.2% of total invested assets for the 27 survey participants. This was a 12-basis point increase from year-end 2015, although the $41 billion in new originations was actually down about $3.5 billion from 2015, with individual respondents’ commercial mortgage holdings ranging from a high of 18.3% to a low of 2.9%.
Performance metrics have generally improved on a year-over-year basis. Insurers’ realized net losses in the general accounts and subsidiary entities of survey participants totaled 0.003% as of Q4 ‘16, compared to 0.01% in the year-ago period. By comparison, CMBS and commercial banks experienced losses of 0.8% (almost unchanged from a year ago) and 0.01% (down 4 bps from a year ago), respectively, as of this past Dec. 31.
Total insurance company loan delinquencies decreased during the second half of last year, averaging 0.04% during the second half of ’16. That’s down 0.14% from year-end ‘015. Most of the delinquencies reported as of Q4 fell into the 90-plus days delinquent category.
The percentage of problem loans—i.e. those 90 or more days delinquent — decreased as well. They totaled 0.04% in the second half of 2016, a decrease of 13 basis points from the second half of 2015.
