Insurance companies have focused on higher yielding paper, within benchmark ABS asset classes in their 2013 new issue investments, according to a JP Morgan report.

Approximately 65% of ABS insurance portfolios are made up of cards, auto and student loan ABS.  Within benchmark autos, for example, JP Morgan calculates that 55% of the investments consist of fleet and subprime transactions, while the rest are prime auto ABS deals.

“Given insurance companies’ typical yield targets, it is likely that they will continue purchasing higher-yielding ABS,” said the report.  

 

 

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