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Homeowners of empty workplace buildings may finally fail, cease making funds and add drama to huge U.S. life and annuity issuers’ quarterly monetary stories. At this level, although, there’s not a lot actual estate-related drama.
Weak point within the business actual property sector is “an enormous danger throughout the monetary markets,” Anika Getubig, an S&P director, mentioned Wednesday throughout an S&P World Scores replace on the fourth quarter of 2023.
Life and annuity issuers look as in the event that they’re managing that danger nicely, she mentioned.
At Morgan Stanley, a group of analysts led by Bob Jian Huang got here to the identical conclusion of their newest quarterly life and annuity sector evaluate.
“CRE publicity inside life insurers investments have held up higher than anticipated all year long,” the analysts wrote of their evaluation of the fourth quarter.
What it means: The issuers backing purchasers’ life insurance coverage insurance policies and annuity contracts proceed to carry out nicely.
The backdrop: Life insurers have invested about 10% of their $5 trillion in belongings in business mortgages, with a few of these belongings in workplace constructing mortgages and securities backed by them.
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