Wednesday, March 25, 2009
After AIG: Which Insurer Is Next in Line for a Federal Handout?
Now that we’ve seen the brouhaha over the AIG government bailout and subsequent payments to US and foreign banks, as well as the outcry over the AIG bonus payouts to employees of the unit responsible for the firm’s transgressions, can we derive any solace that the rest of the insurance industry is sound? Are there any other insurers that may need government help?
Apart from AIG, Are Any of the Other Insurers Next?
So far in 2009, there have been a number of bank failures, and Shenandoah Life has been placed into receivership on the insurance front, with several other insurers capturing headlines due to financial issues. Fortunately, to date there has been more investor concern than policyholder concern. Most insurance stocks remain significantly down for the year, and there has been a marked slowdown in life insurance sales, especially for certain annuity products. But there has not been a major shift to exchange insurance products from the weaker insurers into the stronger ones; we thankfully have not seen a run on the weaker insurers. Nonetheless, rating agencies continue to cut ratings, insurers continue to cut staff and dividends, and asset valuations remain tenuous. In addition, some insurers have asked state regulators for relaxation of regulatory requirements due to reduced risk-based capital ratios, sending a troubling signal to investors and policyholders alike...
Seeking Alpha: After AIG: Which Insurer Is Next in Line for a Federal Handout?
Apart from AIG, Are Any of the Other Insurers Next?
So far in 2009, there have been a number of bank failures, and Shenandoah Life has been placed into receivership on the insurance front, with several other insurers capturing headlines due to financial issues. Fortunately, to date there has been more investor concern than policyholder concern. Most insurance stocks remain significantly down for the year, and there has been a marked slowdown in life insurance sales, especially for certain annuity products. But there has not been a major shift to exchange insurance products from the weaker insurers into the stronger ones; we thankfully have not seen a run on the weaker insurers. Nonetheless, rating agencies continue to cut ratings, insurers continue to cut staff and dividends, and asset valuations remain tenuous. In addition, some insurers have asked state regulators for relaxation of regulatory requirements due to reduced risk-based capital ratios, sending a troubling signal to investors and policyholders alike...
Seeking Alpha: After AIG: Which Insurer Is Next in Line for a Federal Handout?
Permalink posted by markw @ 5:29 AM 
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