2011 Insurer Loan Originations Up 55% from 2010

Insurance companies have once again grown their commercial lending operations, this time almost back to pre-crisis levels. Results for 2011 are out (See Figure 1), and show that $51.7 billion of originations were completed by the top 30 companies, up 55% from the 2010 figure of $33.3 billion. At the height of the lending boom in 2007, insurers peaked at $56.6 billion. The surge in lending in the last two years has been instigated by the ability of insurers to offer more secure and competitive interest rates to borrowers compared to CMBS shops. Furthermore, Metlife’s Mark Wilsmann indicated that from a relative-value perspective commercial properties are currently seen as a more attractive investment for them compared to other fixed-income opportunities of the same risk.

Figure 1. Origination Amounts by Top 30 Insurers ($Billions). Source: CMAlert