US insurers net acquire around $180bn in bonds for total price paid

Written by Adam Cadle

14/01/2021

For the first three quarters of 2020, US insurers net acquired about $180bn in bonds in terms of total price paid, according to the National Association of Insurance Commissioners (NAIC).

For the first three quarters of 2019, however, they net disposed about $33bn in
bonds in terms of total price received.

For both acquisitions and dispositions in the first three quarters of 2019 and 2020, unaffiliated corporate bonds were the largest bond type. Historically, unaffiliated corporate bonds have been the largest bond type held by US insurers at about half of total bond investments.

Life companies accounted for the majority of the industry’s bond acquisition and disposition activity for the first three quarters of 2019 and 2020, followed by P&C companies.

Large insurers, or those with more than $10bn assets under management, also accounted for the industry’s largest bond acquisition and disposition activity for the first three quarters of 2019 and 2020.

More than 90% of bonds disposed during the first three quarters of 2019 and 2020 were considered high-quality investment grade based on their NAIC 1 and NAIC 2 designations.

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