Monday, May 04, 2009


Buffett says life insurers took "crazy" bets

Billionaire Warren Buffett on Sunday criticized some life insurers for taking on "crazy" financial risks by selling variable annuities, or retirement products that promised unrealistic guarantees to buyers.

The products are tied to stock market performance and in some cases guaranteed a certain periodic return, while principal could not be eroded by investment losses.

"I always thought they were crazy when they were doing it," said Buffett, at a press conference in Omaha, his hometown, because of the financial risks to the insurer.

Insurers such as Hartford Financial (HIG.N) and Genworth Financial (GNW.N) have been badly burned by over-selling these products, which performed badly as the credit crisis sent markets plummeting...

Reuters: Buffett says life insurers took "crazy" bets

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