US life insurers and systemic risk

Nathan Foley-Fisher, Nathan Heinrich and Stéphane Verani

Chapter 20 in Research Handbook of Macroprudential Policy, 2026, pp 475-498 from Edward Elgar Publishing

Abstract: We show that US life insurers have developed new businesses aimed at lending to risky firms, against a backdrop of tighter bank regulation and unconventional monetary policy from 2009 onwards. These insurers exploit tax and capital arbitrage opportunities through complex on- and off-balance sheet arrangements. We describe how they have become more interconnected with other financial institutions. These life insurers have grown more exposed to an aggregate corporate sector shock. Their businesses—and the implications for systemic risk—remain opaque. We highlight data gaps and open questions for macroprudential research and policy.

Keywords: Nonbank financial intermediation; Insurance companies; Systemic risk; Leveraged loans; Collateralised loan obligations (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035306206
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