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A.M. BestTV: U.S. Insurers’ Exposure to Real Estate Investment Changes

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February 3, 2016 1:27 PM EST

OLDWICK, N.J.--(BUSINESS WIRE)-- In this A.M.BestTV episode, A.M. Best Senior Industry Research Analyst Jason Hopper discusses the previous and current roles that commercial real estate investments have within the portfolios of insurers. Click on http://www.ambest.com/v.asp?v=realestate216 to view the entire program.

In a recent Best’s Special Report, titled, “Commercial Real Estate Exposures for Insurers—A Total Picture,” it states that over a period of 10 years the level of commercial mortgage loan exposure increased by about 36% to just under $394 billion in 2014.

“Most of that exposure, about 98%-99%, is concentrated within the life/annuity segment, which makes sense since their liability structure tends to be a lot longer,” said Hopper. “Additionally, the longer duration of their commercial mortgage loans fits within their asset/liability management framework and strategy.”

Hopper also said that from an exposure perspective as a percentage of capital, the picture becomes clearer when considering these real estate asset classes on a combined basis. “When you take all of these exposures together—real estate-owned, commercial mortgage loans, commercial mortgage-backed securities, real estate investment trusts—all in total they account for a little over 150% of total capital within the life/annuity industry. About 20% was in the health segment and approximately 10% was in the property/casualty segment.”

To access a copy of the special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=245344.

Recent episodes of A.M.BestTV include:

  • Insurers on Climate: It is Not an Easy Risk to Deal With: At the 2016 Investor Summit on Climate Risk held in New York, NY, insurance representatives said the industry needs to develop more products aimed at supporting energy that is efficient, resilient and renewable: http://www.ambest.com/v.asp?v=unclimaterisk116.
  • California Insurance Commissioner Says Investments in Thermal Coal Don’t Make Sense: At the 2016 Investor Summit on Climate Risk in New York, NY, Dave Jones, insurance commissioner, California, called on insurers in his state to divest from thermal coal and report on their investments in carbon-based energy: http://www.ambest.com/v.asp?v=jones116.
  • Insurers Step Up Their Fraud Defenses: Insurers are turning to predictive analytics to head off and identify frauds, but fraudsters still manage to target homeowners, medical and automobile coverages: http://www.ambest.com/v.asp?v=fraud116.
  • Fairfax’s Prem Watsa Named Leader of the Year; Program Breaks Record: At the annual St. John’s University Insurance Leader of The Year Awards Dinner in New York, NY, Prem Watsa, chairman and chief executive officer, Fairfax Financial Holdings, was named Leader of The Year: http://www.ambest.com/v.asp?v=insuranceleader116.

A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

A.M. Best
Lee McDonald
Group Vice President, Publication and News Services
(908) 439-2200, ext. 5561
[email protected]

Source: A.M. Best


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