Filed Under:Markets, Employee Benefits

US insurers’ purchases of RMBS top $1.2 billion

Sammons Enterprises and Northwestern Mutual made the largest purchases of new private-label (non-agency) RMBS.
Sammons Enterprises and Northwestern Mutual made the largest purchases of new private-label (non-agency) RMBS.

U.S. insurers spent an aggregate $1.21 billion on residential mortgage-backed securities issued by 18 trusts in the first half of 2013, new research reveals.

SNL Financial discloses this finding in a report based on quarterly statutory statements filed by the insurers with the National Association of Insurance Commissioners. The transactions appear in Schedule D, Part 3 of the quarterly statements.

Two life insurers, Sammons Enterprises and Northwestern Mutual, made the largest purchases of new private-label (non-agency) RMBS, the amounts totaling $165.8 million and $128.6 million respectively. Four other life insurance companies — MetLife Inc., Guggenheim Capital LLC, Western & Southern Financial Group and Ohio National Mutual Holdings — are also among the top 10 RMBS buyers in the first half of 2013:

Company

Sector

Actual cost of purchase ($M)

Net admitted bonds ($M)

Ratio of cost of purchase to net admitted bonds (%)

Sammons Enterprises Inc.

Life

$165.8M

$39,175.0

0.42

Northwestern Mutual Life Insurance Co.

Life

128.6

120,153.1

0.11

Motors Insurance Corp. & affiliates

P&C

97.5

1,820.2

5.35

MetLife Inc.

Life

82.0

209,400.3

0.04

Travelers Cos. Inc.

P&C

79.6

57,269.5

0.14

Guggenheim Capital LLC

Life

69.7

14,977.1

0.47

Western & Southern Financial

Life

60.8

23,844.5

0.26

Ohio Nat’l Mutual Holdings

Life

44.4

6,520.6

0.68

Amerisure Mutual Insurance Co.

P&C

37.6

1,450.4

2.59

CNA Financial Corp.

P&C

36.3

33,917.5

0.11

The report shows that a combined 25 insurers accounted for $1.1 billion of the purchases. Other life insurers buying more than $20 billion in RMBS in the first half of 2013 included:

● Genworth Financial ($30 billion)

● Country Financial ($26.2 billion)

● Reinsurance Group of America ($25.3 billion)

● Protective Life Corp. ($24.4 billion)

● Symetra Financial Corp. ($24.2 billion)

● Pacific MHC ($20.9 billion)

● Heritage Life Insurance Co. ($20.5 billion)

The market for residential mortgage-backed securities has been strengthening since 2012, as evidenced by the Federal Reserve Board’s successful auctioning last year of RMBS acquired from American International Group as part of its 2009 bailout of the insurance giant.

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