US insurer CLO exposure rises by 9.5% to $271.2bn

Written by Adam Cadle

17/12/2024

US insurers’ exposure to collateralised loan obligations (CLOs) increased to $271.2bn in BACV at year-end 2023, representing a 9.5% increase from $247.7bn at year-end 2022.

According to the NAIC, CLO investments increased slightly to 3.2% of US insurers’ total cash and invested assets at year-end 2023 from 3% the year prior.

The pace of growth in insurers’ CLO investments, however, continued to slow in 2023, down from almost 15% in 2022 and the 20% range between 2019 and 2021.

The credit quality of US insurers’ CLO investments remained predominantly investment grade, with tranches rated BBB and higher accounting for 82% of total CLO investment and those rated AAA increasing one percentage point to 41%.

Large life companies continue to account for the majority of US insurers’ CLO investment at about 80% of the total.

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