http://blogs.lloyds.com/2008/12/19/are-industry-ceos-resolved-over-jan-1-rate-increases/ A blog for Lloyd's Thu, 8 Oct 2009 08:53:51 +0100 http://wordpress.org/?v=abc hourly 1 http://blogs.lloyds.com/2008/12/19/are-industry-ceos-resolved-over-jan-1-rate-increases/comment-page-1/#comment-273 cj pollick Wed, 24 Dec 2008 15:49:54 +0000 http://blogs.lloyds.com/?p=219#comment-273 Not all of the insurers face the same financial troubles; further, it is oxymoron to compare the insurance industry to the banking industry. It is like comparing apples and oranges--fruit yes, but of significant differences. Banks got greedy, many banks saw their competitors making higher returns on invested funds and simply mismanaged the way they packaged loans, etc. Greed, envy and lack of ethics got the best of many good banks. Insurers, mostly of the larger variety, made underwriting profits, but lost money in the investment department. Packaged securities, substandard mortgage funds, etc., etc. Thus, the laft hand made profits while, what was supposed to be the conservative staff, lost money like drunken sailors on the right hand. If investments were conservative, the insurers would not be seeking government bail-out funds--like AIG. (Who would have ever thought they would be in such a financial mess?) The industry will survive -- however, let's hope we have learned a few things about following any bank lead regarding packaged investments. A modest 3-4% on invested funds during the few few years would have made the insurer a hero. Not all of the insurers face the same financial troubles; further, it is oxymoron to compare the insurance industry to the banking industry. It is like comparing apples and oranges–fruit yes, but of significant differences.
Banks got greedy, many banks saw their competitors making higher returns on invested funds and simply mismanaged the way they packaged loans, etc. Greed, envy and lack of ethics got the best of many good banks.
Insurers, mostly of the larger variety, made underwriting profits, but lost money in the investment department. Packaged securities, substandard mortgage funds, etc., etc. Thus, the laft hand made profits while, what was supposed to be the conservative staff, lost money like drunken sailors on the right hand. If investments were conservative, the insurers would not be seeking government bail-out funds–like AIG. (Who would have ever thought they would be in such a financial mess?)
The industry will survive — however, let’s hope we have learned a few things about following any bank lead regarding packaged investments. A modest 3-4% on invested funds during the few few years would have made the insurer a hero.

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