One glance at the feed from the National Underwriter – Frank seeks to extend NFIP, Industry opposed– was all it took for me to start digging through my notes for Like a cat chasing its tail until I found the article.
Convergence is a topic that continues to gain attention within the insurance industry. It seems that articles for the last 25 to 30 years noted with interest the inevitability of the insurance market and the capital market combining.
I don’t recall reading a word about this convergence in anything about the Bailout; but, clearly there was insurance money in the subprime market. In addition to that we reported in Another Massive Reinsurance Failure (January 2008), we’ve also discussed Allstate’s approximately $4.8 billion investment in subprime mortgage securities. An an article I found tonight said:
The $4.8 billion is approximately equal to all of 2006 earnings…The holdings are approximately 22% of Allstate’s equity.
That looks pretty “convergent” to me and, in an entirely different way, so does the industry’s position on the temporary extension of the NFIP proposed by Senator Frank and opposition to expanding the program to include wind damage as proposed in HR3121. Continue reading “Cat has insurance industry's tongue about "convergence" of Bailout and reauthorization of NFIP”