This move is consistent and parallel with the Brandywine vehicle created for ACE by Dupe, and is merely a means of hiding / separating both of their mistakes/ bad news from their ongoing operations. Admitting to their mistakes would be the proper, honest thing to do when such ‘garbage cans’ are licensed. There were no such admissions by Dupe and the BoD of ACE or AIG. Analysts, execs, and bureaucrats at AMBest, S&P, Fitch, Weiss, NAIC, and the SEC; are you awake?!… if so, what say you?
This action is a perfect example of the principle espoused by Margaret Thatcher in describing Socialism; i.e. “The problem with Socialism is that, sooner or later, you run out of other people’s money.”. In this case, replace ‘Socialism’ with ‘mismanagement of a portfolio of insurance and investments’ and ‘other people’s money’ with ‘reinsurance market support’. Thus, ACE and AIG had to create their own reinsurers to dump their garbage because the usual suspects abandoned them. This is consistent with the US and global reinsurance market becoming more ‘sophisticated’ with the consolidation over the last 3 decades; i.e. more analytic and aware of cedants’ tendencies.
This move is consistent and parallel with the Brandywine vehicle created for ACE by Dupe, and is merely a means of hiding / separating both of their mistakes/ bad news from their ongoing operations. Admitting to their mistakes would be the proper, honest thing to do when such ‘garbage cans’ are licensed. There were no such admissions by Dupe and the BoD of ACE or AIG. Analysts, execs, and bureaucrats at AMBest, S&P, Fitch, Weiss, NAIC, and the SEC; are you awake?!… if so, what say you?
This action is a perfect example of the principle espoused by Margaret Thatcher in describing Socialism; i.e. “The problem with Socialism is that, sooner or later, you run out of other people’s money.”. In this case, replace ‘Socialism’ with ‘mismanagement of a portfolio of insurance and investments’ and ‘other people’s money’ with ‘reinsurance market support’. Thus, ACE and AIG had to create their own reinsurers to dump their garbage because the usual suspects abandoned them. This is consistent with the US and global reinsurance market becoming more ‘sophisticated’ with the consolidation over the last 3 decades; i.e. more analytic and aware of cedants’ tendencies.