Coronavirus-driven economic shock weakens insurance and bank assets

Edoardo Calandro, David Fanger and Daniel Yu of the Banking team zero in on the COVID-19 pandemic’s effects on bank loans in the UK, US and Australia. Plus, Shachar Gonen of the Insurance team and Keith Banhazl of the Structured Finance team look at how much the slowdown in commercial real estate will weaken US life insurers’ CMBS holdings.​ Inside this episode:Shachar Gonen of the Insurance team and Keith Banhazl of the Structured Finance team look at how much the slowdown in commercial real estate will weaken US life insurers’ CMBS holdings.​ (begins at 2:10)Edoardo Calandro, David Fanger and Daniel Yu of the Banking team zero in on the COVID-19 pandemic’s effects on bank loans in the UK, US and Australia. (begins at 7:48)Related content:Life Insurance – US: Credit deterioration picks up in CMBS holdings but capital is resilient. CMBS remains a moderate component in US life insurers’ investment portfolios. The industry’s CMBS credit quality remains strong and capital levels are robust to absorb deterioration.CMBS-US: Moody's DQT - New delinquencies suppressed by temporary relief of forbearance and loan modification agreements. Moody’s CMBS conduit loan Delinquency Tracker (DQT) decreased to 7.51% in September 2020, as forbearance and other loan modifications provide loan relief.Financial Institutions — Banks – Cross Region: Pandemic induced credit losses set to rise. The coronavirus pandemic has pushed many countries into recession, leading to a deterioration in credit conditions that will trigger a significant increase in bank loan losses.