Variable annuities appear to be causing stockholders at insurance companies like Hartford Financial Services, Lincoln National Corp. and Prudential Financial offering these products to develop a case of the jitters, according to the Wall Street Journal.

Shareholders fear the insurers will be forced to sell these products to generate the capital needed to meet regulatory requirements. With market declines, Fitch recently said capital needed to support the variable annuity industry had increased by as much as $15 billion this year.

What remains unclear, according to the article, is how much of a role VAs play in the companies’ financials and how they will manage the risks associated with these products in a new economic climate.

Yet another impact of the sagging economy on the insurance industry.

Frankly, I am unsure about whose plans to implement changes to health care will benefit or harm my business; Sen. Barack Obama’s call for mandated coverage or Sen. John McCain’s proposal for individual health insurance tax credits. Both have their merits, and many — including myself — are mulling over which would be best for their own business and the industry as a whole.

But I do know one thing for certain: In the final debate between the two presidential candidates, Obama looked directly into the camera and told Americans a big, bald-faced lie. Read the rest of this entry »

In these difficult times, where everyone is struggling to make sense and make money in the floundering economy, a little humor in the form of the 20 most unusual names of pets for whom their owners paid insurance is the perfect antidote.

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The fine folks leading American International Group seem to have failed miserably at understanding the financial markets - and now, public sentiment.

This week company officials were rightly taken to task by Congress for holding an expensive retreat in California, to the tune of $440,000, including $23,000 in spa treatments, at a posh resort. AIG officials, with the ink still wet on the $85 billion loan from the government, said the trip was for independent insurance agents for one of its subsidiaries, not its financial service executives. Read the rest of this entry »

The news might be bleak for Wall Street, but news of a proposed $700 billion bailout of the nation’s financial system might give health insurers a break.

A recent Bloomberg News article published in the Salt Lake Tribune posits the notion that taking a gigantic chunk of money from the fed budget to salvage the financial markets from their losses due to the mortgage crisis, will leave little for proposed changes in the nation’s health care system, which, depending on how one views it, could be good news for some large health insurance carriers.

The recent news that Tokio Marine, Japan’s largest insurer, is buying Philadelphia Consolidated Holding Corp. and Philadelphia Insurance Cos. for $4 billion may mark the start of a buying spree for the industry. I’m willing to bet that this deal will be the first in a series of foreign acquisitions of American insurance companies in the near future.With the dollar worth nearly nothing inside, and, more importantly, in this case, outside the U.S. these days, buyers can purchase a lot of American insurance company with their foreign money. Couple that value of foreign money with the tremendous profits property-casualty insurers are amassing since Hurricane Katrina three years ago and it would seem that more of them are likely to become acquisition targets in the near future. The property-casualty market may be the only one, however, to generate foreign interest.The flat life insurance market might discourage acquisitions in that arena, and no one - probably not even some of the health insurers themselves - want to grab onto a health carrier right now with universal health and other reform proposals swirling around.I’ll bet at least two more of these foreign acquisitions will occur in the next six months. 

When you read through all the numbers that tell us in accounting terms that the property/casualty market is as soft as a half-gallon of ice cream sitting in a hot July sun, you find the bottom line is this: in many cases, particularly in the personal lines market, agents are feeling the pinch. And in some cases, such as the recent acquisition of HRH (Hilb Rogal & Hobbs) by Willis, it appears to be fueling mergers and might find some corporate folks out of work.

Worse, though, is the fact that this soft market is unlike many in recent memory due to several factors, but this time the factors are totally unpredictable. Read the rest of this entry »

Martin Sullivan may be out of work, but he certainly is no poorer for his recent firing.

AIG, the international insurance giant once headed by Maurice R. “Hank” Greenberg, recently let go of its CEO of three years following two of the largest quarterly losses the company has ever experienced.

The insurer places blame for the losses on poor performance in the subprime mortgage market. And of course, with Sullivan at the helm of AIG, he gets the axe.

It is said that money can’t buy happiness; but in the case of Sullivan, it can at least buy some consolation. He will receive a severance package in the neighborhood of $35 million to $50 million for doing a substandard job.

That, plus the unemployment assistance that he might sign up for, and Sullivan might not come out too badly.

Small business owners are now more worried about the economy than providing health insurance for their employees, according to an article on IFAwebnews.com.

The news from a survey of small business owners conducted by the National Small Business Association cuts several ways, none of which are good for the insurance industry.

That health insurance isn’t the biggest concern would seem on the surface to be good news. Read the rest of this entry »