Wellington Management
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Fri, 07/28/2023 - 18:42
Loans from Federal Home Loan Banks: An opportunity for US insurers to enhance investment yield and total return
Abigail Clare, Client Service Manager
The views expressed are those of the author at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
Learn why we believe FHLB loans provide compelling potential for insurers to add alpha or increase yield by borrowing at low rates and benefitting from possible favorable treatment by ratings agencies. In addition, explore examples of customized investment solutions that have the potential to capitalize on these advantages.
KEY POINTS
- Federal Home Loan Banks lend to insurers at very competitive rates, providing opportunities to add alpha or enhance yield by borrowing at low cost and investing in risk-appropriate markets.
- Adding to its appeal, FHLB debt may receive favorable treatment as operating leverage by ratings agencies.
- We provide examples of customized investment solutions that can enable insurers to capitalize on the advantages of FHLB borrowings, and we also note potential risks.
Read the Full Paper
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