Hot Insurer Trade Still Seeing Tailwinds: Structured Weekly

Insurers have continued to grow their direct investments in residential mortgage loans amid an influx of cash from annuities — and the trend isn’t poised to let up soon, according to a note last week by JPMorgan.

Insurance companies have doubled their holdings of one-to four-family residential mortgages since 2021 to $94 billion as of the third quarter of last year. That shift has been driven by a combination of greater sales of annuities and the attractive risk-based capital of holding mortgages in their non-securitized form, strategists including John Sim said in the Feb. 28 note.

Demand has been particularly ...