Although delinquency rates for
While life insurers may be able to withstand such losses related to commercial real estate in the short-to-intermediate term, in some cases their ratings may be downgraded when because of pressure from other asset classes and products.
Conservatively, Fitch projects that life insurers will take a hit of $15.7 to $19.1 billion on their commercial real estate
“Loss exposure for U.S. life insurers will be mitigated compared to other market participants due to their
“Fitch’s Negative Outlook for life insurers continues to be driven largely by concerns over investment losses due to deterioration in the
According to Fitch, the life insurance industry is generally better positioned than other investment sectors to ride out current market disruptions. The sector’s health stems from its stable liability profile and positive cash flow.
However, the rating agency notes that significant declines in capital over the past 18 months have weakened insurers’ ability to manage through a prolonged economic downturn.