Life Insurers’ Corporate Debt Tops $2 Trillion: Credit Markets
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U.S. life insurers are boosting their holdings of corporate bonds at the fastest rate in six years in an effort to jolt returns by taking on more credit risk amid near-zero interest rates.
Net purchases by the insurers climbed to a seasonally adjusted annual rate of $165.4 billion last quarter from $64.5 billion in the three months ended June 30, the biggest inflow since 2004, according to data released by the Federal Reserve in Washington last week. For the first time, they now own more than $2 trillion in the securities issued by companies.