Globally, insurers have 9-12% participation in the commercial real estate (CRE) market through direct and indirect investments in mortgages, bonds and directly owned real estate, according to a Gallagher report on its website.
Insurance companies are major investors in commercial real estate, with U.S. and European insurers investing approximately 12% and 7% of their investment portfolios in the sector, respectively. A potential recession, especially one caused by commercial real estate, has caused some concern in both the life and life insurance industries.
Also among the key findings of the report is that COVID-19 and the rise of the work-at-home workforce has led to a dramatic increase in downtown commercial real estate availability, among other things. This trend shows no signs of reversing.
Recessionary headwinds remain low with healthy US and EU economies stagnating but not contracting. China remains strong in absolute terms despite lower growth than in the recent past.
Banks have steadily increased their investments and expanded credit lines for commercial real estate. This has helped explain how the sector has remained resilient in difficult times.
