13 March 2023Insurance

US insurers lose over $800m on SVB bank collapse

The US insurance industry may face as much as $800m in losses from investments in failed US bank Silicon Valley Bank, the nation's 16th largest bank which was shut by regulators as depositors raced for the exits.

US insurer holdings, measured from fair values readings on the Q3 2022 portfolio, likely came to $817 million, the brokerage arm of Wells Fargo said in research.

In the UK, regulators opted to forego a resolution of the local branch of SVB, hustling the bank into the arms of HSBC instead.

The US creditor list is led and dominated by life insurers. Athene tops the list with a $112 million position that accounts for a heady 4.5% of the US group's statutory surplus. Lincoln Financial follows with $90 million or 1.1% of its surplus.

TIAA, New York Life, MassMutual and Protective round out positions 3 through 6.

But P&C insurers are also facing losses from the failed bank. Mark Swiss Re down for $27 million, The Hanover for $22 million, AXA for $18 million and WR Berkley for $17 million, all at less than 1% of surplus.

“We cannot be sure if companies have bought or sold additional securities since 9/30/22,” analysts at Wells Fargo acknowledged. Of the top 15 insurance holders of SIVB bonds Lincoln had shown the highest run-up in holdings in 2022.

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