Alternatives don’t make up a particularly large percentage of insurance companies’ portfolios, but in a deep dive of Schedule BA investments, Sterne Agee analysts John Nadel, Wesley Carmichael, and Michael Ward found that alt exposure goes as high as a quarter of GAAP equity. Insurers with highest exposure to riskier alternatives “As a percentage of GAAP equity the exposures are in some cases material. Companies with the highest exposure to “riskier” alternatives (private equity, hedge funds, etc.) include Principal Financial Group at 24% of equity, Metlife at 22%, and Prudential Financial and American International Group, each at 18%,” they write….