Great! The money changers have exhausted the banks abilities to do banking ,now they want to open up insurance reserves to the same risk the crappy bankers used to bankrupt their system. If our legislature had any sense at all there would never have been a requirement for insurance companies to comply with investment regulators. Insurance is insurance::Investing is investing. Mixing the two just opens too many doors for a weakened monetary system.
Insurance companies have always relied on investment income to help when their underwriting is not so profitable. The investment doors have been squeezed and they are having a hard time making money on investments. I prefer the steady ones who invest in long term municipal bonds etc. The ones who have been hurt have gotten into riskier investments like the bundled mortgage scams which led to the meltdown. As I recall, Hartford had to be bailed out and AIG was the worst example of poor investment strategy. They are still into the taxpayer for about $80 Billion.
This is license for AIG to repeat their past. They told SEC that CDS are insurance but told Insurance Dept they are Securities, and taxpayers bailed them out.
This request for wanting to dabble in hedge funds seems contradictory for an industry which often proclaims “We are going back to the basics and emphasizing underwritng profit.” Perhaps I am too old to appreciate the changing times but my training was that an insurance company always worked for an underwriting profit. Investment income was gravy and nothing more. Therefore, why would a prudent solvent insurer want to invest in hedge funds?
You assume Ins Cos are run by insurance professionals, faulty assumption. They are run by MBA. I worked for Commercial Union in the past when it was largest in the world and at a meeting the managers want the marketing people to write more EC policies. (extended coverage) as if it was a separate line of insurance. Commercial Union is no more. It takes too much time, training and effort to make an insurance profit, it’s easer to try and make it in the market.
Most of the problems in the P&C business have resulted from Financial people getting involved in insurance. They have no clue about it and end up screwing the pooch. Mergers, consolidations into conglomerates have ruined many a fine company and they get rid of their good core underwriters in favor of wet behind their ears trainees who have little if any common sense. They don’t have to pay them as much, but what value are they contributing to the company?
Great! The money changers have exhausted the banks abilities to do banking ,now they want to open up insurance reserves to the same risk the crappy bankers used to bankrupt their system. If our legislature had any sense at all there would never have been a requirement for insurance companies to comply with investment regulators. Insurance is insurance::Investing is investing. Mixing the two just opens too many doors for a weakened monetary system.
Insurance companies have always relied on investment income to help when their underwriting is not so profitable. The investment doors have been squeezed and they are having a hard time making money on investments. I prefer the steady ones who invest in long term municipal bonds etc. The ones who have been hurt have gotten into riskier investments like the bundled mortgage scams which led to the meltdown. As I recall, Hartford had to be bailed out and AIG was the worst example of poor investment strategy. They are still into the taxpayer for about $80 Billion.
This is license for AIG to repeat their past. They told SEC that CDS are insurance but told Insurance Dept they are Securities, and taxpayers bailed them out.
This request for wanting to dabble in hedge funds seems contradictory for an industry which often proclaims “We are going back to the basics and emphasizing underwritng profit.” Perhaps I am too old to appreciate the changing times but my training was that an insurance company always worked for an underwriting profit. Investment income was gravy and nothing more. Therefore, why would a prudent solvent insurer want to invest in hedge funds?
You assume Ins Cos are run by insurance professionals, faulty assumption. They are run by MBA. I worked for Commercial Union in the past when it was largest in the world and at a meeting the managers want the marketing people to write more EC policies. (extended coverage) as if it was a separate line of insurance. Commercial Union is no more. It takes too much time, training and effort to make an insurance profit, it’s easer to try and make it in the market.
Most of the problems in the P&C business have resulted from Financial people getting involved in insurance. They have no clue about it and end up screwing the pooch. Mergers, consolidations into conglomerates have ruined many a fine company and they get rid of their good core underwriters in favor of wet behind their ears trainees who have little if any common sense. They don’t have to pay them as much, but what value are they contributing to the company?