Month: July 2024

Private Credit Characteristics

Mary Pat Campbell

Link: https://content.naic.org/sites/default/files/capital-markets-market-buzz-private-credit-plr.pdf

Graphic:

Excerpt:

The terms private credit and private letter ratings (PLRs) have unintentionally elicited some confusion
about their respective meanings. While there is no standardized definition, and the term may be used
differently by market participants, private credit generally refers to debt, or debt-like, securities that are
not publicly issued or traded. On the other hand, PLRs refer to credit opinions that are assigned to
privately rated securities by credit rating providers and are only communicated to the issuer and a
specified group of investors.


To bring some clarity, at least with respect to how the NAIC views them, these terms can be characterized
in two dimensions: 1) distribution; and 2) transparency.

Publication Date: 30 July 2024

Publication Site: NAIC Capital Markets Bureau Market Buzz

The Housing Bubble Keeps Expanding, Case-Shiller Home Prices Hit New Record

Mary Pat Campbell

Link: https://mishtalk.com/economics/the-housing-bubble-keeps-expanding-case-shiller-home-prices-hit-new-record/

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Excerpt:

Housing affordability continues to soar out of reach of most buyers. Not only are prices at a new record level, mortgage rates remain close to 7.0 percent.

Chart Notes

  • Case-Shiller measures repeat sales of the same price over time. It is the best measure of price, but it lags. Current data is as of May which reflects sales 1-3 months prior.
  • The CPI, OER, and Rent of Primary Residence are all from the BLS.
  • OER stands for Owners’ Equivalent Rent. It is the rent one would pay if someone was renting instead of paying a mortgage.

Author(s): Mike Shedlock (Mish)

Publication Date: 30 July 2024

Publication Site: MishTalk

Mortality Stays Slightly Elevated: Globe Life Exec

Mary Pat Campbell

Link:https://www.thinkadvisor.com/2024/07/30/mortality-stays-slightly-elevated-globe-life-exec/

Excerpt:

Since the COVID-19 pandemic began, in early 2020, Globe Life has been one of the life insurers that’s been quickest to give analysts candid assessments of U.S. mortality.

Mortality is much lower than it was when pandemic-related mortality was peaking, and mortality trends are now helping, not, hurting, Globe Life’s earnings, Kalmbach said.

“Mortality has been fairly consistent over the last few quarters, which has been good,” he said.

He sees the mortality rate from accidents and other nonmedical causes improving.

….

“Heart disease and cancer, although improved, are still a little bit higher,” he said. “Another one that remains elevated as a cause of death is neurological disorders, which would be stroke and Alzheimer’s. We’re keeping an eye on that.”

Author(s): Allison Bell

Publication Date: 30 July 2024

Publication Site: think Advisor

How COVID-19 has Affected Mortality in 2020 to 2023 [Australia]

Mary Pat Campbell

Link: https://www.actuaries.asn.au/public-policy-and-media/our-thought-leadership/reports/how-covid-19-has-affected-mortality-in-2020-to-2023?utm_medium=email&utm_campaign=240722-PPP-How%20COVID-19%20has%20Affected%20Mortality%20in%202020%20to%202023-Members&utm_content=240722-PPP-How%20COVID-19%20has%20Affected%20Mortality%20in%202020%20to%202023-Members+CID_aedad499bf553276132939b99d7a0215&utm_source=Campaign%20Monitor&utm_term=How%20COVID-19%20Affected%20Mortality%20in%20Australia%20from%202020%20to%202023

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Excerpt:

There were 8,400 more deaths in Australia in 2023 than predicted had the pandemic not occurred – less than half of the almost 20,000 excess deaths estimated for 2022.

The new Research Paper from the Mortality Working Group explores how COVID-19 affected mortality in Australia from 2020 to 2023 and how Australia’s experience compares with the rest of the world.  

In brief: 

  • The steep decline in excess deaths in 2023 was primarily due to the number of people dying from COVID-19 falling to 4,600 in 2023 from 10,300 in 2022.  
  • While Australia’s excess mortality rate had dropped substantially, it remains significantly higher than the 1-2% excess observed in years of high flu deaths prior to the pandemic.  
  • When analysing the excess mortality of 40 countries from 2020 to 2023, Australia’s excess mortality over the four-year period (5%) was low by global standards (11%).  

Author(s): Mortality Working Group. Members Karen Cutter, Ronald Lai, Jennifer Lang, Han Li, Richard
Lyon, Matt Ralph, Amitoze Singh, Michael Seymour, Zhan Wang.

Publication Date: July 2024

Publication Site: Actuaries Institute

IRS: ILLINOIS LOSES $9.9B IN INCOME AS 87,311 RESIDENTS MOVE OUT IN 2022

Mary Pat Campbell

Link: https://www.illinoispolicy.org/irs-illinois-loses-9-9b-in-income-as-87311-residents-move-out-in-2022/

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Excerpt:

New data shows $9.9 billion flowed from Illinois to other states because people moved out in 2022. Most of those leaving earned $100,000 or more.

When Illinoisans move away, they take their money with them: $9.9 billion in 2022, according to new data from the Internal Revenue Service.

Tax returns for 2021 and 2022 show Illinois lost 86,693 individuals and $9.9 billion because of outmigration. Most of them were high-income Illinoisans.

Author(s): Bryce Hill

Publication Date: 1 July 2024

Publication Site: Illinois Policy Institute

U.S. Insurers’ Bank Loan Exposure Rises at a Decelerated Pace in 2023

Mary Pat Campbell

Link:

https://content.naic.org/sites/default/files/capital-markets-special-reports-bank-loans-ye2023_0.pdf

Graphic:

Executive Summary:

Bank loan investments increased to about $122 billion in book/adjusted carrying value (BACV)
at year-end 2023 from $117 billion at year-end 2022.

Despite the 4.6% growth, bank loansremained at 1.4% of U.S. insurers’ total cash and invested
assets at year-end 2023—the same as year-end 2022.

Approximately 70% of U.S. insurers’ bank loan investments were acquired, and 85% were held
by life companies.

In particular, large life companies, or those with more than $10 billion in assets under
management, accounted for 82% of U.S. insurers’ bank loan exposure, up from nearly 80% in
2022.

The top 25 insurance companies accounted for 75% of U.S. insurers’ total bank loan
investments at year-end 2023; the top 10 accounted for about 60%.

Improvement in credit quality for U.S. insurer-bank loans continued, evidenced by a fourpercentage-point increase in those carrying NAIC 1 and NAIC 2 designations and a
corresponding four-percentage-point decrease in bank loans carrying NAIC 3 and NAIC 4
designations.

Author(s): Jennifer Johnson

Publication Date: 16 July 2024

Publication Site: NAIC Capital Markets Special Report