Moody’s: Life insurance companies in America have turned 800 billion dollars abroad in 6 years

Life insurance companies in America have transferred approximately $ 800 billion of their money and reserves into their foreign companies outside the border between 2019 and 2024, due to the state of transformation that occurred in the sector due to the growth of private credit, which formed added risks that surrounded it, according to Moody’s credit rating in a recent report.

Moody’s analysts said in the report that, in light of the low interest and its approach to scratch during the period from 2015 to the beginning of 2020, public life insurance companies have adopted several approaches to maximize their gains and stay more competitive with the increase in special credit of their counterparts in the markets.

They added that these approaches included the partnership and integration with private stock companies, or alternative asset managers, in a trend that continued its features, even though the main interest rates have become more high now.

Moody’s said that there are deals with acquisition and integration of private property rights for life insurance companies, which are valued at $ 75 billion between 2019 and 2024.

Among them is the sale of “Olastite” company for its life insurance arm and its annual companies known as “Eferke”, for entities run by the “Plaston” group, with a total value of $ 2.8 billion. In addition to the “Brucefield” reinsurance deal for “American National” company in 2022, at a value of $ 5.1 billion.

The report revealed that this trend led life insurance companies and alternative asset managers to move billions of dollars from their companies inside the United States to accounts belonging to them outside the country’s borders in the “Bermuda” and “Cayman” islands at a record pace not previously recorded.

Moody’s report analysts considered that it did this in order to liberalize the capital “to support growth, and to provide pricing and more competitive returns in products such as the annual insurance payments specified for a certain period … (as well as) to trace the impact of popular activities for shareholders such as shares.”

According to Moody’s agency, American life insurance companies have about 6 trillion dollars in cash and invested assets until the end of 2024, while an estimated third of that amount was allocated in a special credit form.