Insurance investing
Taxable munis:
Taxable munis:
The original infrastructure credit and a modern portfolio ballast
Listen to this InsuranceAUM podcast episode featuring Dan Close, Head of Municipals at Nuveen, and Emilia Wiener, Chief Investment Officer of the TIAA General Account, and as they make the case for taxable municipal bonds in an insurance portfolio.
Five things we may have forgotten about taxable munis
- Munis aren't corporate bonds
Municipal issuers have simple balance sheets with no equity layer, no LBO risk, and potentially lower merger threat. With 60,000+ issuers ranging from small districts to state governments, each demands independent credit analysis. - Potentially less downgrade sensitivity in times of stress
In downturns, muni spread widening can be more muted than in corporate credit. Essential revenue streams have historically been resilient, and issuers have levers corporates lack: rate adjustments, reserves, and state support. - Relative value is more than just spread
AA and single-A munis currently offer more spread than equivalently rated corporates, with lower historical default rates and roughly double the recovery experience in stress scenarios, according to Moody's data.1 - Munis have the duration insurers need
Long-duration muni supply aligns naturally with the long, sticky liability profiles of insurance general accounts. For carriers seeking durable income potential and ALM precision, the muni market offers a depth of duration that is difficult to replicate elsewhere in investment grade fixed income. - Munis are the OG infrastructure credit
From New York City water in the 1830s to today's airports and power grids, munis have always financed essential infrastructure, long before "infrastructure" became a dedicated institutional asset class.
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Data source:
1 Moody’s Ratings, U.S. Municipal Bond Defaults and Recoveries, 1970 – 2024, 05 Aug 2025, with data as of 31 Dec 2024; updated annually. Performance data shown represents past performance and does not predict or guarantee future results. The universe for the study represents approximately 12,500 fundamental U.S. public finance ratings from Moody’s.
AUM as of 31 Mar 2026. Nuveen assets under management is inclusive of underlying investment specialists. Totals may not equal 100% due to rounding.
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