ETFs in Insurance General Accounts – 2023

Featured Image - Exhibit 1

Written by: Raghu Ramachandran, Head of Insurance Asset Channel


In 2022, the amount of exchange-traded funds (ETFs) held by U.S. insurance companies in their general accounts dropped 23.5% (or USD 11.2 billion) to USD 36.6 billion.  This represents the first substantial drop in ETF assets since insurance companies started buying ETFs in 2004.  However, two factors complicate analyzing the drop in ETF assets.  The first is the unusual bear market we had in 2022, with both equity and fixed income markets showing sharp declines—the S&P 500® dropped 19.4% and the S&P U.S. Investment Grade Corporate Bond Index dropped 14.3%.  In 2022, insurers withdrew USD 4.1 billion from ETFs, so valuation declines explain approximately two-thirds of the drop in AUM.  Also in 2022, two Mega insurers decided to exit all public equites, including ETFs.  This represented USD 3.5 billion of all the withdrawals.  Excluding these two companies from the analysis, insurer ETF AUM declined by 16.5%—or in line with market results.

Even though most U.S. insurer assets are in Fixed Income, insurers typically invested in Equity ETFs.  This continued to be the case, even with the large amount of Equity ETFs sold by the two Mega companies.  Outside of these two companies, we saw flows into Equity ETFs and away from Fixed Income ETFs.

In our eighth annual study of ETF usage in U.S. insurance general accounts, we also analyzed the trading of ETFs by insurance companies.  For the second consecutive year, trade volume declined; however, the overall trend remains positive, with 2022 trade volume increasing 350% over 2015 trade volume.

Holding Analysis


As of year-end 2022, U.S. insurance companies invested USD 36.6 billion in ETFs.  This represented only a fraction of the USD 6.5 trillion in U.S. ETF AUM and the USD 7.9 trillion in invested assets of U.S. insurance companies.  Exhibit 1 shows the growth of ETFs by U.S. insurance companies over the past 18 years.

Featured Image - Exhibit 1

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