Insurers are not banks
Lincoln Financial Field, affectionately called “The Linc”, has been at the centre of plenty of chaos over the years.
The Philadelphia stadium — home of the Eagles — has seen the city’s notoriously rowdy American football fans throw batteries, climb lampposts and trash its surroundings. It even briefly had a jail for fans to sober up after brawls, though it didn’t rival its predecessor’s jail-and-courtroom combo.
A few examples from 2022 annual reports: Lincoln had roughly $12bn of net unrealised losses on its $111bn available-for-sale bond portfolio. Prudential had more than $23bn, or 7.5-per cent of its AFS portfolio, AIG had nearly $30bn of unrealised losses on its $226bn portfolio, and MetLife had $29bn, or 12 per cent of its AFS bonds.
One important caveat applies to this part of the story, however.
Safe assets’ unrealised losses are mainly worrisome if those assets need to be liquidated. Treasuries and safe bonds presumably have no default risk, so investors are guaranteed to have their principal repaid if they hold them to maturity.
This story originally appeared on: Financial Times - Author:Alexandra Scaggs
