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.
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.