What You Need to Know
- The new affiliate will develop fixed-rate, investment-grade investment products.
- The assets inside the products could include multi-family rental properties and homeownership access loans.
- The affiliate is a product of the ACLI Economic Empowerment and Racial Equity initiative.
U.S. life insurers hope to use part of their trillions of dollars in assets to help more people of color get affordable homes.
The American Council of Life Insurers announced last week that it will be starting a nonprofit affordable housing investment partnership.
The partnership will use cash from 36 founding life insurer partners to develop affordable, sustainable housing, the ACLI said.
The partnership will have a board that will identify community development and affordable housing projects, and it likely will create opportunities for the member insurers to invest in fixed-rate, investment-grade, long-term investment instruments that are suitable for life insurers’ investment portfolios, the ACLI added.
“No exact financial target will be set for partnership initiative investments,” the ACLI noted.
What It Means
If the new partnership succeeds, U.S. life insurers could end up investing less money in low-yielding financing for high-cost housing, often in waterfront locations that are vulnerable to flooding and windstorms, and more in affordable housing.