Analysts Unfazed as Insurers Boost Loss Reserves by Billions

Large insurers are setting aside billions of dollars in the first quarter under a new accounting standard designed to help investors gauge their lending risk.

The new standard, known as the current expected credit loss accounting method (or CECL), makes companies reserve for potential loan losses up front, instead of waiting for when the factors show the loan will go delinquent. Although it was focused on banks that make loans, it also applies to insurers which buy and sell loans on the secondary market to diversify their investment portfolios.

The tougher standard meant that three of the biggest public, multiline ...