December 18, 2009
Moody’s is estimating that life insurers will take a hit of about $10B on commercial real estate investments in 2010. The loss estimate is revised upwards from $7B, but the insurers will fare much better than banks.
Insurers are also beginning to again increase their interest in commercial real estate as bond yields have come down, particularly on corporate bonds who some insurers were viewing as a more attractive alternative.
Insurers based outside the U.S. are seeking to expand in commercial property and lending, and say distressed owners and lenders may lead to opportunities. Canada’s Sun Life Financial Inc. said last month was lifting its moratorium and may invest in commercial mortgages. Allianz SE, Germany’s biggest insurer, expects to find bargains in U.S. commercial property, finance head, Paul Achleitner, said in October.
- S&P on Insurers and CRE
- Fitch: Life Insurers To Face More Losses
- Prudential CRE US Quarterly Update
- Moody’s: CRE Prices Will Continue To Fall
- Government Moving Towards Bailout of Commercial Real Estate