ETF holdings in US insurer general accounts surge 18.4% in 2020 to $36.9bn

Written by Adam Cadle

28/05/2021

US insurance companies had $36.9bn in ETFs in general accounts as of 31 December, an 18.4% increase from the year before, according to a report from S&P Dow Jones Indices.

The report said the increase in ETF AUM in 2020 was at a higher rate than the 16% increase in 2019.

The report said the growth rate implies a doubling of ETF AUM every four to five years. S&P Dow Jones Indices has data tracked back to 2004, when there was less than $5bn in ETF AUM in insurance company general accounts.

"The continued growth in ETF usage by insurance companies comes from both new companies starting to use ETFs, and companies which already use ETFs buying more ETFs," said Raghu Ramachandran, head of insurance asset channel at S&P Dow Jones Indices and author of the report.

"Even though insurers invest mostly in fixed income securities, they had historically invested in equity ETFs. However, in 2020, these companies increased fixed income ETF usage by 52%," he said.

"I think it is also interesting that in 2020, insurers traded four times the amount of fixed-income ETFs they held at the beginning of the year. So they are using the liquidity of the ETF market to their advantage."

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