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Fitch: Life Insurers To Face More Losses

January 22, 2010

Fitch is predicting that US Life Insurers (a la MetLife) may be looking at an additional $15B in commercial real estate related losses. The estimate is that they have taken about 25% of the losses thus far, and most of the losses will take place within the next two years.

The life insurers have already booked about $5 billion in such losses since the economic crisis began, bringing the expected total to $20 billion, Douglas L. Meyer, a Fitch analyst, said today in an interview. Most future losses will be taken this year and in 2011, he said.

“The U.S. life industry has a large exposure to CRE- related assets through direct mortgage origination, investments in commercial mortgage-backed securities, and to a lesser degree, investment in real estate equity,” Fitch wrote in a note to clients.

Still, the delinquency rates on life insurer loans are far below what they are at the CMBS or community bank levels.

[via Business Week]

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Categories: Commercial Finance and Lending | Commercial Real Estate Investing
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Nick Satel January 25, 2010

That explains a lot. We have a beautiful Airplane Museum and IMAX theater up in Oregon that an Insurance company sunk their teeth into right away. Borrower is a major company CEO worth nearly a billion between all his holdings. The minute we signed with the client and went forward the Insurance company backed out and completely changed their tune. We are still seeking a new investor and it is going on nearly two months since we signed the Loan Proposal.

Nick Satel

Valiant Funding

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