US insurance industry’s cash and invested assets rise to $8.5trn

Written by Adam Cadle

09/05/2024

The US insurance industry reported $8.5trn in total cash and invested assets at year-end 2023, an increase of 4.4% versus year-end 2022, the NAIC has revealed.

Consistent with prior years, US insurance companies’ four largest asset classes were bonds, common stocks, mortgages, and other long-term invested assets reported in Schedule BA.

Mortgage exposure grew at a faster pace than growth in total cash and invested assets, increasing 5.7% at year-end 2023 compared to the prior year.

The share of bonds in the US insurance industry’s investment portfolio decreased to 60.8% at year-end 2023, while the share of common stocks increased to 13.9% following an equity market recovery in 2023. The fastest growing bond types in 2023 included agency-backed residential mortgage-backed securities (RMBS), private-label RMBS and asset-backed securities (ABS) and other structured securities, with exposure increasing 13%, 13% and 10%, respectively, compared to the prior year.

The credit quality of the bond portfolio improved to pre-pandemic levels at year-end 2023, with bonds designated NAIC 1 and NAIC 2 increasing modestly to 95% of total bond exposure from 94.7% at year-end 2022.

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