Berkshire Hathaway Inc. and a handful of other insurance companies grew their short-term investment holdings since the end of 2021 amid the high-interest rate environment in the US, according to an S&P Global Market Intelligence analysis.

The bulk of Berkshire's short-term investments lie with its property and casualty (P&C) subsidiaries, but its life companies own significant holdings as well. Its P&C subsidiaries' short-term investments in 2023 exceeded $60 billion and reached the highest level since 2001 with an aggregate carrying value of $92.68 billion as of Sept. 30, 2023, a 100.1%, or $46.37 billion, increase from year-end 2021. There is only one other instance where the company's net short-term investments assets exceeded $60 billion, which was at the end of the third quarter of 2020.

For its life companies, Berkshire subsidiaries reported $5.76 billion as of Sept. 30, 2023, on a statutory basis. Its short-term investments accounted for 21.6% of its total investable assets, the largest among the nine insurers with at least a $500 million change in net short-term investments assets.

Adding life and P&C totals together, Berkshire's statutory short-term investment holdings total $98.45 billion. Discussing its strategy in its latest quarterly report, the company said "maintaining ample liquidity is paramount and we insist on safety over yield with respect to short-term investments."

This analysis is limited to select P&C and life insurers with a change in net short-term investments assets from Dec. 31, 2021, to Sept. 30, 2023, of more than $500 million. The industry documents linked below include P&C and life insurers with a change in net short-term investments of at least $100 million. The last chart in this article is limited to P&C and life companies with net short-term investments of at least $100 million as of Sept. 30.

Data is sourced from the assets page within the life and property/casualty statements filed with the National Association of Insurance Commissioners. Short-term investments as defined by the NAIC include bonds; mortgage loans; other short-term investments assets; and investments in parent, subsidiaries and affiliates in which maturities or repurchase dates at the time of acquisition were one year or less.

Smaller life insurers also grew short-term investments

Many companies smaller than Berkshire also grew short-term investments since 2021. In general, these companies increased their holdings from an insignificant amount to a sizable portion of their investment portfolio.

Brookfield Reinsurance Ltd. saw the largest increase outside of the Berkshire companies. From year-end 2021, it increased its short-term investments from just over $110 million to nearly $3 billion as of Sept. 30, 2023.

The Northwestern Mutual Life Insurance Co. is the other group in the analysis with a change of more than $2 billion in short-term investments from 2021 to Sept. 30, 2023. Northwestern Mutual also saw the largest net yield on average invested assets year to date at 4.4%.

EquiTrust Life Insurance Co. is the only individual company on the list. The company saw its short-term investments of $475.4 million in 2021 grow by 300.2%, which translates to a change of $1.43 billion, to $1.90 billion as of Sept. 30, 2023.

The remaining statutory life groups on the list — Symetra Life Insurance Co., Allianz SE and Equitable Holdings Inc. — held little to no short-term investments in 2021 but had $1.43 billion, $889.1 million and $668.4 million in short-term holdings as of Sept. 30, 2023, respectively.

– Download the previous chart for P&C insurers. – Download the previous chart for life insurers. – Read the interactive 2023 US Insurance Investments Market Report.

HCI relies most on short-term investments

HCI Group Inc.'s short-term investments of $165.6 million represents 28.4% of its total investable assets. This is a decline from year-end 2022, when short-term investments accounted for 39.2% of its total investable assets. The 28.4% is the largest share among P&C and life insurers with net short-term investments assets of more than $100 million as of Sept. 30, 2023.

Security National Financial Corp.'s life subsidiaries came second, with short-term investments accounting for roughly a quarter of its total investable assets. That is a decrease from 33.6% at year-end 2021 but an increase from 21.1% in 2022.