Authors: Fulvia Fringuellotti and João A.C. Santos
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Staff Reports
Insurance Companies and the Growth of Corporate Loans' Securitization
Number 975
August 2021 Revised June 2026
August 2021 Revised June 2026
JEL classification: G11, G20, G22
CLOs have emerged as the fastest growing asset class in insurance companies' portfolios after the Global Financial Crisis. This was induced by insurers' capital regulation which treats CLO tranches the same as equally-rated corporate bonds, despite the former offering higher yields. Consequently, insurance companies developed a preference for CLOs over corporate bonds, which was strengthened by a 2010 regulatory reform. Insurers' CLO investments shaped the CLO market, influencing deal structures and fueling its rapid post-crisis growth. This expanded credit access for corporate borrowers, especially riskier firms. It also led to a substantial transfer of credit risk from banks to insurers.
Author Disclosure Statement(s)
Fulvia Fringuellotti
I, Fulvia Fringuellotti, declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
João A. C. Santos
I, João Santos, declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
I, Fulvia Fringuellotti, declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
João A. C. Santos
I, João Santos, declare that I have no relevant or material financial interests that relate to the research described in this paper. Prior to circulation, this paper was reviewed in accordance with the Federal Reserve Bank of New York review policy, available at https://www.newyorkfed.org/research/staff_reports/index.html.
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