Day: September 25, 2008

Breaking: WaMu is Toast

Yahoo has the story:

Washington Mutual Inc was closed by the U.S. government in by far the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion.

Thursday’s seizure and sale is the latest historic step in U.S. government attempts to clean up a banking industry littered with toxic mortgage debt. Negotiations over a $700 billion bailout of the entire financial system stalled in Washington on Thursday.

Washington Mutual, the largest U.S. savings and loan, has been one of the lenders hardest hit by the nation’s housing bust and credit crisis, and had already suffered from soaring mortgage losses. Continue reading “Breaking: WaMu is Toast”

Survival of the Fittest Part Deux: AIG Strikes Back UPDATED

I may not know much about insurance but I know my surety bonding. AIG isn’t happy with Travelers and Chubbs and they claim the state regulators aren’t either.  Phil Gusman reported these breaking developments for the National Underwriter:

An AIG executive said recent changes in some competing companies’ positions regarding writing excess policies over AIG primary policies, or co-surety policies with AIG, are not based on market realities.

Competitors are trying to take advantage of the uncertainty surrounding the AIG liquidity crisis, suggested John Doyle, president and CEO of Commercial Insurance at AIG.

His remarks came during a Risk and Insurance Management Society (RIMS) webinar, “Risk Management Strategies in an Unsettled Financial Market.” Continue reading “Survival of the Fittest Part Deux: AIG Strikes Back UPDATED”

Significant inland wind damage from Gustav and Ike

I ran across two articles in the Insurance Journal that provide some additional insight on non-coastal areas that would benefit from expanding the National Flood Insurance Program to cover wind damage as well as flooding. Given my position the need is inland as well as coastal, the stories on wind damage from Hurricane Gustav in Alexandria, Louisiana and Hurricane Ike in Kentucky caught my eye.

Alexandria is about 150 miles from Morgan City and both are easy to spot on this map of Louisiana.

Officials say Hurricane Gustav inflicted more than $25 million worth of damage in Alexandria, La., when it blew through in early September.

The estimate exceeding more than $25 million does not include damage from wind and falling trees to individual homes nor does it include individuals’ costs related to power outages. (emphasis added)

About half of that amount came from estimated damage caused by roof collapses at the Alexandria Mall during Gustav…

Rebecca Mowbray’s story in the Times Picayune provides information that support for the NFIP expansion – information in quotes from Commissioner Donelon! Continue reading “Significant inland wind damage from Gustav and Ike”

Jim Brown on Subprime, Default Credit Swaps and Insurance Regulation

Former Louisiana Insurance Commissioner and our good friend Jim Brown was kind enough to share his weekly column with us here at slabbed. It deals with subprime, credit default swaps and insurance regulation and is very well done. I highly recommend it to our readers that are not financially oriented as Jim makes the issues and concepts very understandable.

sop

________________________________________________________

Thursday, September 25th, 2008
Baton Rouge, Louisiana

GREED IS GOOD IN LOUISIANA

The national financial crisis finds Wall Street and financial regulators scurrying for cover, and trying to find a quick fix to financial problems that have festered for years. It’s puzzling that there is been nary a peep out of Louisiana officials, particularly in light of the fact that lack of regulation of the very financial institutions creating this meltdown has been part of the culture of Louisiana regulators for years. Where is the outrage by Louisiana members of Congress? And why have Louisiana legislators failed to address a number of serious financial problems right here at home?

Oh you will hear that this is a federal problem, and there is not much which Louisiana officials can do about the financial meltdown. But even though there is plenty of blame to go around, at least in other states, there is a scurrying of effort to tighten the regulatory system that in recent years has acquired a laissez-faire mindset.

So can we get a simple explanation as to exactly what happened? Continue reading “Jim Brown on Subprime, Default Credit Swaps and Insurance Regulation”

Survival of the Fittest: Travelers and Chubb Take a Shot at AIG's Surety Business

It didn’t take long for AIG’s competitors to make a play for nervous contractors and project owners. Phil Gusman at the National Underwriter filed this report:

Chubb Group of Insurance Companies and Travelers will no longer participate as partners on co-surety bonds with American International Group, according to a Marsh brokerage executive.

That news emerged during a telephone conference call held today by Marsh to provide an update on the global commercial insurance market in light of the turmoil in the financial markets.

Mark Nickel, who is with Marsh’s surety practice, said Travelers is not willing to participate on co-surety on any bonds not approved by last Friday 19.

Clients will need to replace either Travelers or AIG, he said. He added that, up until Nov. 19, in order to allow for an orderly transition, “Travelers is prepared to absorb AIG’s share of the co-surety exposure if the client needs that additional time to find additional surety capacity or to replace either Travelers or AIG.”

This development is of interest to me professionally. Continue reading “Survival of the Fittest: Travelers and Chubb Take a Shot at AIG's Surety Business”

Survival of the Fittest: Travelers and Chubb Take a Shot at AIG’s Surety Business

It didn’t take long for AIG’s competitors to make a play for nervous contractors and project owners. Phil Gusman at the National Underwriter filed this report:

Chubb Group of Insurance Companies and Travelers will no longer participate as partners on co-surety bonds with American International Group, according to a Marsh brokerage executive.

That news emerged during a telephone conference call held today by Marsh to provide an update on the global commercial insurance market in light of the turmoil in the financial markets.

Mark Nickel, who is with Marsh’s surety practice, said Travelers is not willing to participate on co-surety on any bonds not approved by last Friday 19.

Clients will need to replace either Travelers or AIG, he said. He added that, up until Nov. 19, in order to allow for an orderly transition, “Travelers is prepared to absorb AIG’s share of the co-surety exposure if the client needs that additional time to find additional surety capacity or to replace either Travelers or AIG.”

This development is of interest to me professionally. Continue reading “Survival of the Fittest: Travelers and Chubb Take a Shot at AIG’s Surety Business”