The bad news about commercial real estate just keeps coming, and now it's life insurance companies that are being hit. In the first quarter of 1991, a record 4.8% of the $213 billion in commercial mortgage loans held by life insurance companies were delinquent by two months or more, according to a survey by the American Council of Life Insurance. That's up from 3% a year ago and 3.7% at the end of 1990. Indeed, the current delinquency rate has now exceeded the previous high set in 1976.
As bad as the overall numbers are, some regions are doing even worse. Besides the existing problems in New England and Texas, life insurers saw delinquency rates in the Mountain region, including Arizona, jump from 6.3% to 9.9% since the end of 1990. The East Coast, from New York to Florida, also showed a big increase in bad loans. According to Margaret M. Alexandre, an analyst at Salomon Brothers Inc., these real estate problems are likely to get worse in the next 12 to 18 months. So those life insurance companies with loans concentrated in the most depressed regions could be facing still tougher times.