Clearwater Analytics: Non-US insurers are divesting from the US
New analysis from Clearwater Analytics shows non-US insurers are cutting their US exposure, with recent trade policy rhetoric and actions accelerating the divestment.
Data from 50 non-US insurers from the UK, Norway, Netherlands, Ireland, France, Germany, Belgium and the rest of the world with more than $100 billion in combined assets shows a clear trend of ‘Sell America’ in the year through to June, pivoting to continental European assets.
The book value of their US assets has dropped 4.5% since the end of last year while the total book value of all assets has increased by 1.5%. Meanwhile, analysis of transactions data shows net purchases of US assets have dropped to their lowest level in at least 18 months.
Daily net purchases of US assets surged in the immediate aftermath of the US election but are now down 56% (90-day moving average) since November, with the most precipitous decline following tariff action in February.
However, according to Clearwater Analytics, the trend isn’t universal across asset classes or market observers. Some major firms including Blackstone have recently predicted a “restoration of confidence” in US assets and expect a recovery in capital markets while US Treasury Department data shows foreigners invested a record net $311.1 billion in US securities in May.
Clearwater data shows US assets still comprise over half of the insurers’ combined holdings. For those firms with at least 1% in direct US exposure, however, average exposure has declined from 56% at the start of the year to 51% in June.
Not all US asset classes have seen divestment, the analysis found, with the book value of US structured products holdings having increased 9% through June since the end of 2024.
The book value of assets by geography for the sample of insurers shows increases of 8% in continental Europe and 5% in the ‘rest of the world’ compared to a 1.5% decrease in US assets since December.
“While this research should not be extrapolated to wider market flows given its narrow scope, it is concrete evidence that at least some foreign investors have divested from the US in a short timespan," Matthew Vegari, Head of Research at Clearwater Analytics commented. “At the aggregate level, there is evidence of a year-to-date decline in US exposure. The weaker US dollar and stronger euro play a role but that is secondary to the decline in US holdings."