Insurers’ High-Yield Bond Exposure Grows Amid COVID-19-Related Credit Deterioration in 2020

by Michele Wong and Jean-Baptiste Carelus of the NAIC

Per the NAIC, insurer high-yield bond exposure at or near highest since 2012.

"Following more than 10 years of a relatively benign credit environment, the economic and financial effects of the COVID-19 pandemic, combined with a sudden and sharp decline in oil prices, led to significant pressure on credit quality in 2020. As a result, the nationally recognized statistical rating organizations (NRSROs) took a record number of negative rating actions, affecting fixed income securities across many bond categories, including corporate, municipal, and structured securities."

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Insurers’ High-Yield Bond Exposure Grows Amid COVID-19-Related Credit Deterioration in 2020

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