U.S. life and annuity issuers seem to be cutting down on investments in securities backed by consumer debt.
Analysts at the National Association of Insurance Commissioners’ Capital Markets Bureau have raised that possibility in a new report based on insurers’ financial reports. The analysts looked at insurers’ holdings of three classes of asset-backed securities: securities backed by auto loans, credit card debt and student loans.
Life insurers’ holdings of securities backed by credit card debt fell to $4.3 billion at the end of 2018.
That’s down 66%, from a total of $13 billion, that the Capital Markets Bureau reported for the end of 2012, in an asset-backed securities report released in May 2014.
Total holdings in the three classes of consumer asset-backed securities covered fell 20%, to $25 billion.
Holdings in securities backed by student loans increased 30%, to $8.1 billion.
Holdings in securities backed by auto loans held steady at $13 billion.
The United States had about $514 billion in auto, credit card debt and student loan asset-backed securities outstanding March 31, up from $505 billion at the end of 2012, according to data from the Securities Industry and Financial Markets Association cited by the NAIC analysts.
Life insurers now hold about 5% of the investments in those three classes of asset-backed securities, down from 6.2% at the end of 2012.
A copy of the NAIC report on insurers’ consumer asset-backed securities holdings is available here.
— Read U.S. Life Insurers Hold 15% of U.S. CLO Assets, on ThinkAdvisor.