U.S. Insurance Industry’s Exposure to Securities Lending and Repurchase Agreements Decreased in 2018
By Jennifer Johnson of the NAIC
"For U.S. insurers, securities lending generally represents a potentially low-risk asset management strategy. Insurers not only earn a modest income on fees charged to counter parties (or “borrowers”) on securities lent, but also they earn income on the cash or securities received in exchange for the loaned securities (the“reinvested collateral”). Historically, securities lending has not been a significant investment strategy for U.S.insurers, with reinvested collateral at less than 1% of U.S. insurers’ total cash and invested assets."