US insurers’ exposure to municipal bonds decreases by around 7% to $434.3bn

Written by Adam Cadle

29/09/2025

US insurers’ exposure to municipal bonds decreased by about 7% to $434.3bn from $467.5bn at year-end 2023, figures published by the National Association of Insurance Commissioners (NAIC) have revealed.

Furthermore, municipal bond investments by US insurers have been gradually declining over the last decade and were 8% of total bond at year-end 2024, down from 14% in 2014.

Municipal bonds are the third-largest bond type for US insurers, having been surpassed by asset-backed securities (ABS) and other structured securities as the second-largest bond type in 2022, where they have since remained.

Like the overall municipal bond market, revenue bonds comprised about 70% of US insurers’ municipal bond investments, with the remainder in general obligation bonds.

The NAIC said that P&C insurers continue to account for half of US insurers’ exposure to municipal bonds, followed by 44% with life insurers.

Large insurers, or those with more than $10bn in AuM, accounted for around 60% of US insurers’ municipal bond investments in 2024.

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