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CCarr
Canada
1200 Posts |
 Posted - 03/17/2003 : 16:23:27
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In various forums in the last month, there has been mention or reference to the profit or loss, or strength or weakness, of insurers; due to premium levels, claims volume and severity, and their eroding return on invested premiums.
While impending doom is not upon the marketplace, I have in my commentary on the subject, spoke of the tough marketplace; and the financial concerns of the industry.
To perhaps illustrate this better, the attached link story will certainly speak of those woes.
ING is one of the largest and strongest multinational financial services companies; which is also a major player in the insurance industry worldwide.
Although not directly related to insurance operations, the link story is a common thread; of the current financial troubles of financial services companies.
www.insurancejournal.com/news/newswire/international/2003/03/17/27140.htm
This is on the heels of the disturbing reported story, of the impending potential insolvency of Gerling Global Reinsurance company; a reinsurer that has been around for generations, a former force in its marketplace.
A reinsurer's failure to comply with their contract terms, with any contracted primary insurer; could cause a 'domino effect' financial crisis, to primary insurers. |
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Justin
USA
137 Posts |
Posted - 03/17/2003 : 22:47:07
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| Clayton, I am sure you are aware that Warren Buffet [ the sage of Omaha ] has been trying to shut down General Re for several years. If you have not yet read his annual report to stockholders, please look it up on the net it will scare you to death. He claims that derivitives have been written that will literally explode the financial markets, many of these underwritten by General Re. His report says they are down to around 650 derivite contracts they are insuring and some of them go out quite a few years. He seems to imply that many other insurance companies are also caught up in this derivite mess. |
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CCarr
Canada
1200 Posts |
Posted - 03/18/2003 : 00:02:21
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Yes Justin, I am aware of the "Oracle of Omaha". The summary of his report, that you mention, is found at the following link.
www.insurancejournal.com/news/newswire/international/2003/03/11/26935.htm
Since then, it has been reported that Allianz, another very large multinational primary general insurer, is owed over $600M USD, by Gerling Global Re; who are in arrears for that payment.
I am also hearing stories within the industry, that some insurers have not yet negotiated their 2003 contracts with their treaty reinsurers (this is normally a done deal by the end of January); and that some of those won't, because of cost or terms or both. This causes the need to write fac re on each account past retained nets, which for numerous reasons, including cost; can not go on for very long. |
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CCarr
Canada
1200 Posts |
Posted - 03/18/2003 : 12:38:33
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A couple of more links to current reported stories, that will aid or assist in our understanding of the current difficulties, related to the marketplace from which we derive our income.
www.insurlinks.com/fullnewsstoryraw.cfm?ID=975
www.insurancejournal.com/news/newswire/national/2003/03/18/27165.htm |
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ChuckDeaton
USA
373 Posts |
Posted - 03/18/2003 : 18:17:14
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| It's smoke and mirrors, smoke and mirrors, magic tricks that is all the US economy is. Insurance makes the economy possible, look at the mold catastrophe in Texas, fear that a house could not be insured nearly shut the Texas economy down. |
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ChuckDeaton
USA
373 Posts |
Posted - 03/19/2003 : 17:18:22
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Joe Smith started the day early having set his alarm clock (made in Japan) for 6 a.m.
While his coffeepot (made in China) was perking, he shaved with his electric razor (made in Hong Komg). He put on a dress shirt (made in Sri Lanka), designer jeans (made in Singapore) and tennis shoes (made in Korea).
After cooking his breakfast in his new electric skillet (made in India), he sat down with his calculator (made in Mexico) to see how much he could spend today.
After setting his watch (made in Taiwan) to the radio (made in India) he got in his car (made in Germany) and continued his search for a good-paying American job.
At the end of yet another discouraging and fruitless day, Joe decided to relax for a while. He put on his sandals (made in Brazil) poured himself a glass of wine (made in France), turned on his TV (made in Indonesia), and then wondered why he can't find a good paying job ... in AMERICA !!!
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JimF
USA
1014 Posts |
Posted - 03/19/2003 : 17:41:35
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| Well the good news is that if Old Joe had imbibed a bourbon instead of French wine, he would at least have been sending a few bucks to the folks in Tennessee or Kentucky. |
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CCarr
Canada
1200 Posts |
Posted - 03/21/2003 : 22:48:30
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According to the UK London Financial Times, around $250 billon has been "wiped off the global insurance industry's balance sheet in the past three years.
Allianz, a world wide insurer, a large writer in north america, and owner of Firemans Fund, and Europe's largest insurer by premium income; is next to show its pain and depth of its bleeding; that in its overall financial services structure, requires a $5.3 billion increase to boost their weakened capital base.
It was odd when I read the article, regarding the ownership of Firemans, a fact that I had lost track of; when I was a young pup and started with them, they were owned by American Express.
Anyway, the link story has the detail
www.insurancejournal.com/news/newswire/international/2003/03/20/27249.htm
Chuck, it is not "smoke and mirrors". |
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olderthendirt
USA
370 Posts |
Posted - 03/22/2003 : 08:34:17
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| It is interesting, most of the real problems are in two areas. One is that inusrers are trying to get into banking, with the same skill leave they handle their own business and are lossing money. Also they are taking write downs for the drop in the stock market. This is not real money lost but when the markets rise they will gain it back, meanwhile they get great tax breaks. While there are real problems there is also smoke and mirrors. Note the comments from Allianz about strengthening insurance operations. |
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CCarr
Canada
1200 Posts |
Posted - 04/01/2003 : 18:36:07
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News today that Gerling Global Re is being decommisioned, they have not written any new business since October 2002; with assest units being sold off. They were a major player in the "Re" world.
SCOR, out of France, the world's 7th largest reinsurer, registered a net loss for 2002 of $496M USD, coming after a net loss in 2001 of $304M USD. The only thing saving the holes in their pockets from ripping right open, at this time, is the recent climb of the Euro against the USD. |
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Newt
USA
657 Posts |
Posted - 04/02/2003 : 10:26:17
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| Every large cooperation is loosing money, and it stems from two causes, drop in stock prices and the bleeding off of capitol by the CEOs and execs. I don't know about smoke and mirrors, but from what I read, every company has some dirty laundry. The sad part, they are ruined before the investigation takes place. Too many hogs with their snoot in the trough. All this lost money no doubt is the drop in stocks, The execs are taking the profit and the stock holders are left holding the bag. Its no wonder the stocks are off because the stock holders are not getting any of the profits,even though the large numbers are still there. |
Edited by - Newt on 04/02/2003 10:29:44 |
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Strength & financial stability of insurance market
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