Pub. 6 2016-2017 Issue 5

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S March • April 2017 11 FEATURE ARTICLE DAVID SHOEMAKER AND KEN DERKS EQUIAS ALLIANCE As competition for attractive investments has increased due to low yields, many carriers have moderately increased duration. B ank-owned life insurance (BOLI) has undergone a number of changes since it was first introduced in the early 1980s. The number of carriers offering BOLI was a handful in the 1980s, increased to 20 or so in the 1990s and 2000s, and since has decreased to 8 to 10 active carriers as a num- ber of insurers have exited the market or are currently sitting on the sidelines due to the low rate environment. As competition for attractive investments has increased due to low yields, many carriers have moderately increased duration. Interest- ingly, several carriers have reduced purchases of below investment grade securities as the yield spread available for them has decreased to the point where the investment return does not justify the increased risk. On the sales front, in the first six months of this year, there was a 10 percent increase in The Bank-Owned Life (BOLI) Insurance Market is Changing: Here’s How