...More Exposed to Corporate Credit: Fitch Ratings believes that the U.S. life insurance industry is more exposed to corporate credit ris k than it w as prior to the 2008¡2009 financial crisis. This means that the industry is more susceptible to rating migration in the next credit market dow nturn, and this increased exposure has low er credit quality and low er liquidity characteristics on an absolute basis and relative to regulatory capital than before the financial crisis. This deterioration is further compounded by reduced quality of capital in the industry. Corporates Fared Well in Crisis: Corporate credit performed relatively w ell, despite the severity of the financial crisis, the Great Recession and the subsequent slow economic recovery. The economic and market dow nturn had a much bigger negative impact on structured securities, real estate-related securities and financial sector corporate securities. Shift to Corporate Securities: Since the financial crisis, U.S. life companies have...
