Absolutely appalling behavior. The exposure is small, but it is - quite literally - socializing their credit losses.
$1T in exposure is not large - but an implosion would mean a 8-14% haircut on life insurance policies. The reality would likely be far worse. Mutual companies (owned by their policy-holders) would be unaffected, while some corporate policy holders may in fact get nothing when they expected multi-hundred thousand or multi-million dollar payouts in a tragedy.
Given the size of liabilities, some states or municipalities could go bankrupt or at least have to cut public services.
People wonder why everyone hates PE.
Source: At the end of 2024, there were 139 life
insurers directly owned by PE firms that collectively held about $700 billion in assets, as well as another $300 billion in life insurers held as portfolio companies within PE funds. 169 While exact numbers differ by study, directly-PE-owned life insurers alone represent at least 8% of life-insurance-industry assets, 170 and other studies put the 2024 figure at around 14% of life insurer general-account assets.
Absolutely appalling behavior. The exposure is small, but it is - quite literally - socializing their credit losses.
$1T in exposure is not large - but an implosion would mean a 8-14% haircut on life insurance policies. The reality would likely be far worse. Mutual companies (owned by their policy-holders) would be unaffected, while some corporate policy holders may in fact get nothing when they expected multi-hundred thousand or multi-million dollar payouts in a tragedy.
Given the size of liabilities, some states or municipalities could go bankrupt or at least have to cut public services.
People wonder why everyone hates PE.
Source: At the end of 2024, there were 139 life insurers directly owned by PE firms that collectively held about $700 billion in assets, as well as another $300 billion in life insurers held as portfolio companies within PE funds. 169 While exact numbers differ by study, directly-PE-owned life insurers alone represent at least 8% of life-insurance-industry assets, 170 and other studies put the 2024 figure at around 14% of life insurer general-account assets.
The true hackers of the system.
Are we sure it's not fraud though?
Seems like the kind of topic kalzumeus would bite into.
It could also be fraud, because they are not marking to market the true value of the loans / assets.
Bad news bears.