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April 06, 2020 at 10:46 PM
U.S. life and health insurers hold about $99 billion in lodging-related debt, but most should come out of the COVID-19 travel freeze in pretty good shape.
Jennifer Johnson, an analyst with the National Association of Insurance Commissioners’ Capital Markets Bureau, has put data supporting that conclusion in a review of U.S. insurers’ holdings of commercial mortgage-backed securities, or CMBS, that are tied to hotels, motels and other forms of lodging.
Resources
- A copy of the NAIC’s lodging exposure report is available here.
- An article about life insurers’ credit card-related assets is available here.
A commercial mortgage-backed security is an arrangement that gives an investor a chance to profit on a loan that a company has used to buy real estate, or on a collection of two or more commercial mortgage loans in a “pool” of loans.
The NAIC is a Kansas City, Missouri-based group of state insurance regulators. One of state insurance regulators’ main jobs is to oversee U.S. insurers’ $6.5 trillion in investments.
U.S. insurers ended 2019 with $174 billion in investments in CMBS assets, and $125 billion in lodging-related CMBS holdings, according to NAIC data in the new report.
Life insurers have $95.4 billion lodging CMBS holdings, and health insurers have $3.4 billion in lodging CMBS holdings.
