[IMPACT+: This series features IMPACT posts that take a longer look at vital topics that affect Americans.]
Considering our role providing much-needed financial security to families and driving impactful investment in communities nationwide, the life insurance industry is well-positioned to support efforts to close wealth gaps and drive substantially greater economic equity.
That is why America’s life insurance companies are partnering in ACLI’s Economic Empowerment and Racial Equity Initiative to take concrete steps to achieve greater economic empowerment of financially underserved communities across the country. These efforts are not only the right thing to do from a societal perspective, but they also provide the potential to generate market returns to help build and sustain positive economic outcomes in underserved and undercapitalized communities over the long term. The opportunity for life insurers to invest in underserved communities with this dual purpose in mind is significant.
One proven step is through life insurers’ strategic deployment of investment capital. For example, we at New York Life announced a $1 billion impact investment initiative in April 2021 focused on addressing the racial wealth gap by investing in underserved and undercapitalized communities over the next three years with a focus on supporting small businesses, affordable housing, and community development.
Most recently, we committed $50 million in long-term capital to Century Housing Corporation. Century provides vital capital in low-income communities throughout California and has invested more than $2.3 billion over the past 26 years, supporting more than 50,000 affordable housing units. Other investments have included $50 million commitments to both IMPACT Community Capital and Enterprise Community Loan Fund in support of affordable housing initiatives and a $150 million commitment to Fairview Capital in support of diverse and emerging fund managers and hundreds of small businesses.
New York Life’s long-term impact investment strategy is to develop large-scale solutions and investment structures that aim to deliver broad and inclusive economic outcomes linked to job growth, health and wellness, and personal and household advancement.
Our program is emblematic of the commitment by life insurers to address the challenges faced in underserved communities. Life insurers invest millions of dollars every day in affordable housing, hospitals, schools, and other initiatives nationwide. Our industry’s investments in underserved communities increase the promise of upward mobility for their residents.
Life insurers make safe, prudent investments that help fulfill their guarantees to provide financial protection for families and retirees across the nation. These investments are consistent with stringent state investment requirements while helping to bring economic opportunity to communities from coast-to-coast.
Through these strategic initiatives, our industry is moving to bridge racial and socioeconomic divides across the nation. The industry is committed to helping all Americans – regardless of their race, gender, or economic status – access information, tools, and leadership opportunities. The dual purpose of these efforts promises to result in not only improved financial security for more families, especially in underserved communities, but also deliver the market returns to life insurers that will sustain positive economic outcomes over the long term.
Martin King is Managing Director and Head of Impact Investments at New York Life.
