Swiss Re forecasted the current pressure in the office sector and tighter lending standards to last for several years.
However, the reinsurer believes the challenges are unlikely to pose systemic risks.
Swiss Re noted that the U.S. commercial real estate sector faces material headwinds over the coming years.
- The analysts predicted a multi-year downturn in the office space, forced by the structural changes in the post-pandemic economy.
- They expect this to add pressure on small banks and insurers. Swiss Re believes insurers will face less stress than banks due to a lack of deposit risk.
- It pointed to only 36% of annuity liabilities allowed to be withdrawn by policyholders without penalty, and P&C liabilities are run-proof.
