livesinhiscar

The Insurance Industry's Invisible Meltdown

>>The insurance industry companies have always been major investors in commercial real estate as they seek to match long term assets with long term liabilities.

Life Insurance companies always have this problem every cycle.
They have to match long-term liabilities and long-term assets, but they have to mark-to-market every quarter those assets.
One quarter where the assets decline serverly, even though they are not needed for perhaps decades out in the future can bring the company down.
We've seen this happen before in previous real estate cycles causing several life insurance companies to fail.
Curious that the industry has not found a solution to this long-term matching of assets/liabilies and the need to mark-to-market the assets short-term. Till they do, this problem will repeat every cycle.