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THIS IS HILARIOUS !!!!! Liberty Mutual AND their Regional Markets were the BIGGEST WHORES on the street the past 10 years. AND NOW THEY WANT TO LECTURE ABOUT GETTING MORE RATE? Bah-ha-ha-wah-ha-ha-ha-ha-ha. Oh please !! That’s a good one. Yes, right, that’s a good one right there.
I have been posting for several months that most of the happy talk by CEO’s & their like has been shameless posturing, when it comes to higher rates that will really improve the bottom line. Unless the CEO’s are ready to face the rampant overcapacity, caused by bailed out AIG & others, in both domestic & international markets, the so-called insurance market pricing will remain broken. AIG remains backstopped by the US taxpayer, & will require a further bailout. Other carriers that saw their stock prices in single digits during the recent financial crisis, will also be in line for taxpayer cash.
If you do not agree that this will happen, are you paying attention to what is going on in Europe, where major international insurers are now trading in single digits?
Wrong.
AIG will not require another bailout and the P&C arm of that company still operates without a problem. Remember it wasn’t the P&C operation that had the exposure to the toxic debt, it was the investment arm in London. If you look at their balance sheet, those instruments have been sold, which precludes the need for a bailout.
As for European insurers, their system is also completely different than the US. The companies over there are allowed to hold riskier assets without having to put up any collateral in the even those assets fail. The US insurance system forces carriers to be conservative – which is why there wasn’t a single P&C carrier failure between 2008-2011 caused by bad asset holdings. Don’t try to lop AIG in there, because the P&C operations were no worse than every other carriers.
Other than AIG, name 5 stocks of international P&C companies that traded in the single digits. Swiss Re, no. Munich Re, no. Chubb, No. Travelers, No. Allianz, no. Zurich, no. Allstate, no. State Farm, no. Try again…
So its ok to operate with riskier assets and put the co and asstes at risk? Then have a bailout? Where is the corp responsiblity, be it P&C or other? AIG is part of why this worlds economy is such as it is. Europe is a mess and the US is not far behind. No excuses, PLEASE.
Dear Status Quo,
It must be wonderful to look at the world with the certainty that you have. Did you short as I did AIG on its way to zero during the last financial crisis? I did, because I saw how phoney their financials were. Sorry to say, you can no longer short financials, as the Fed has their back in the rigged stock market, with trading volumes that continue to decline. Why not tell this board, what expertise you have to be so certain?
Please also stop repeating the same AIG line that it was the financial end that caused the problem & now all is resolved.
Why do you think the financial products operation was set up in the first place? It was established because the P&C arm had stopped delivering the numbers, & Greenberg new it. Greenberg,
also known as a driven, detailed oriented, controlling executive, set up financial products in such a way that when|if it imploded, he could then say his oversight was minimal.
Getting back to the article, you do not dispute that the market pricing mechanism is broken & Liberty & other AIG competitors admit they are not getting proper premium.
I agree with tagteam. This seems to be an ongoing joke among the major insurance companies to become so conservative and responsible when times are hard. Then when times improve, being consevative and responsible takes a back seat to being the most competitive. Sort of like the old Thomas Nast cartoon where all the culprits are standing in a big circle pointing to the person on their right. If asked who is responsible for the current hard and soft market cycles their unanimous reply would be “Twas HIM!”.
What we need is about eight to ten carriers off the street, and then you’ll see sanity return to pricing and selection. Liberty Mutual, QBE, and Nationwide need to get back into buy mode as soon as their reorganizations are completed, and get rid of some of these super regionals.
You can keep the large National carriers as far as I am concerned. Hartford, Travelers, Liberty, Zurich, Etc…. Not really interested in becoming their “Partner” Only until the next quarterly profit is met, Then there is always the knee jerk underwriting followed by a slew of non renewals.