Filed under: Berkshire Hathaway (BRK.A), Allstate Corp (ALL), MetLife Inc. (MET)
In the U.S. alone, insurance companies hold more than $2.2 trillion in corporate debt, having spent 2009 buying bonds at a faster rate than it had in the past five years. As Warren Buffett of Berkshire Hathaway (BRK.A) put it, the market was “raining gold.” Net purchases of corporate bonds by the U.S. insurance industry jumped to $153 billion last year, most of it in the first quarter, when yields were highest. In 2008, outflows reached $59 billion. In 2004, inflows hit $172 billion.
According to Judy Greffin, Allstate’s (ALL) chief investment officer, tells Bloomberg News, “It has paid off very nicely,” as evidenced by the 20% growth in Allstate’s corporate debt holdings last year, which reached $33.1 billion. She continues, “With the benefit of hindsight, I would have loved to have bought more.” Likewise, Buffett indicated that he should have invested more. MetLife (MET) and Prudential Financial (PRU) also benefited from the corporate debt rally, which has helped them recover much of the capital lost from the financial crisis of September 2008.
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U.S. Insurers Addicted to Corporate Bonds originally appeared on BloggingStocks on Tue, 23 Mar 2010 11:30:00 EST. Please see our terms for use of feeds.
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