Life insurers’ exposure to high yield fixed income has waxed and waned over the decades for a myriad of reasons: regulatory constraints, reserve and risk based capital requirements, and interest rate and spread volatility, to name a few. Despite all this, high yield fixed income can serve as a critical portion of life insurers’ investment portfolios, providing material yield and income benefits to a company’s overall operating income profile. In addition, the depth and breadth of the high yield markets may provide a wealth of opportunities for insurers to complement and diversify their current fixed income portfolios with improved yields and within their own specific risk budget.
Join us for a discussion including the life insurance industry’s historical allocations to the various segments of the high yield market as well as the various risk and capital considerations life insurers need to consider when allocating assets to the high yield markets, and an update from DDJ Capital Management on marketplace intelligence into the middle market segment (EBITDA of $75mm to $250mm) of high yield with a particular emphasis on the CCC rated portion of high yield. They will also discuss the relative value, diversification benefits, and significant income potential that CCC’s can provide to life insurer portfolios.
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