Today, Columbus Georgia based Aflac is being hammered on the stock market, mainly because of the fact it’s major underwriting markets are in the US and Japan with 75% of its business coming from Japan.
The Aflac goose has become an advertising icon in the US and Japan and it is a little known fact that the Japanese hated the American rendition of the Aflac goose so the Japanese goose was kinder and gentler as these youtube embeds indicate: Continue reading “AFLAC!!!!!!!!!!!!!!!!! Life imitating art imitating life as Gilbert Gottfried’s goose was cooked!”
If you’re insured with Allstate or are thinking about insuring with them this post is for you as I’ve had Allstate and its incompetent CEO Tom Wilson on my mind for the past week or so. Now that I have a few good links, allow me to share some of the indicators I look at on individual stocks when performing DD (due diligence). Speaking of DD, it is an ongoing process that never ends which is one of the reasons I think most folks are far better off in no load mutual funds (offered by low-cost producers like Vanguard).
We last visited with Allstate last Thursday after they whiffed on their Q4 earnings. Mr Wilson has a curious business strategy for an insurance company in withdrawing Allstate from taking HO (homeowners insurance ) risks in coastal America, where roughly half the nation’s population lives. That is not unusual as many of the insurance companies are doing like wise but unlike State Farm, which bought into the Bermudian reinsurance market to capitalize on the shortage of coverage they helped create, Allstate has pursued a different strategy of using non admitted carriers to insure the void, at so-called market rates as non admitted carriers do not have rate regulation.
The rationale for using non admitted carriers is simple. Consumers typically bundle their HO coverage with their auto policy and insurance companies make a mint selling auto insurance. Withdrawing from the coast has its draw backs and the loss of the auto policies with the homeowners is a real downside to the industry’s current price-fixing scheme for wind insurance. Continue reading “The Wilson effect: Sure signs the market is becoming concerned about Allstate’s long term solvency”
We have so much going on here at Slabbed right now we could literally spend all our waking moments authoring posts on the various topics we’re covering but since Nowdy, Bam Bam and I all have day jobs that won’t happen. In order to save a bit of time I’m combining today’s other news in one post thus the title. Nowdy will be along later to chip in her two cents.
We start with a reader tip on Ashton O’Dwyer, a troubled man who now is in deep trouble. He has been remanded to federal custody without bond. Hopefully he is also being pumped full of meds and receiving some badly needed counseling.
Next up and certainly in keeping with today’s theme of folks that are delusional, here is a story from the National Underwriter on that Property Casualty Insurers Association of America meeting held last month in San Antonio which we began profiling yesterday. This report, written by my main man Sam Friedman, covered the remarks of David Sampson, president and chief executive officer of the Property Casualty Insurers Association of America. Here are some excerpts:
Property and casualty insurers could easily be trapped in the “wave of political populism” sweeping the country in the wake of the nation’s economic and leadership crises, an insurer association leader warned.
“Many may believe that because people are so focused on bashing the bankers and Wall Street that the public and politicians will leave insurers alone, but I am not so sanguine,” said David Sampson, president and chief executive officer of the Property Casualty Insurers Association of America.
Of course Mr Sampson is not so sanguine as he certainly is aware the public is paying attention even though his script is not based in any sort of reality as we continue: Continue reading “Slabbed news miscellany: AROD remanded without bond. Backlash against government subsidized property and casualty insurers. UPDATED with scoop from the Ladder – Dr. Van Heerden filing suit against LSU!”
Attorney General Richard Blumenthal…announced a $1.3 million settlement with The Hartford Financial Services Group, Inc., resolving claims that it participated in several anticompetitive schemes that illegally inflated insurance and reinsurance costs nationwide. h/t Insurance and Law
The Hartford and Guy Carpenter have a different spin on the story. Naturally.
A spokesman for The Hartford said in a statement by e-mail, “We are pleased to have come to an agreement with the attorney general’s office. The Hartford has been out of the property and casualty reinsurance business since 2003, and we agreed to this settlement to avoid ongoing expenses related to the case.
“We believe our participation in the reinsurance facilities was lawful. We settled to avoid the costs of litigating with the attorney general over a business that The Hartford exited years ago.”
In an e-mail response to the attorney general’s accusations a spokesperson for Guy Carpenter said, “Guy Carpenter shares the view expressed earlier today in a statement made by The Hartford that: participation in these reinsurance facilities was, and is, lawful.
“Guy Carpenter continues to believe that the Connecticut Attorney General’s complaint is unfounded. These facilities result in improved terms and pricing of reinsurance for small- and mid-sized clients.”
Back now to Attorney General Blumenthal’s release:
“The Hartford is making history by this first-in-the-nation settlement—and drawing back the cloak of secrecy of a series of illegal price-fixing conspiracies that inflated insurance costs by hundreds of millions of dollars nationwide at the expense of 170 insurance companies and their customers,” Mr. Blumenthal said. Continue reading “$1.3 million reinsurance price fixing settlement announced”
And you’ve read every detail of the aberrant behavior of many insurance companies that do not pay legitimate claims in companies like Allstate, State Farm, USAA and Nationwide. The larger question becomes is there an insurance company that actually treats their customers fairly come claim time?
I don’t know why I haven’t yet linked the FBIC website rankings of insurer claims practices here on Slabbed because they rank not only the worst bad faith insurers but also the ones that treat their customers right. Here is the FBIC’s list of the top 10 bad faith insurers which includes life and health insurers as well as P&C insurers:
1. The Hartford
2. State Farm
4. Unum (UnumProvident)
5. Berkshire Hathaway
7. American Family (Of pink pig fame)
9. Lumbermens (Kemper)
10. Assurant Health
And the good faith insurers?: Continue reading “Suppose you are a consumer who reads slabbed…..”
Dr Ed Duett of Mississippi State has all the finest insurance crooks coming to speak at MSU’s annual insurance day set for April 23, 2009. Our readers may recall he brought in Rossie for I day 2008. This year’s list of crooks and charlatans is very impressive and includes a record number of participants with ties to companies under current federal investigation and/or hogs at the taxpayer TARP trough. The complete speaker list is here but I thought I’d summarize the various sessions for our reader’s convenience:
The Revolving Door Panel:
Mike Chaney, MS DOI
Jim Ridling, AL DOI
Scott Richardson, SC DOI
George Dale, Adams and Reese
Walter Bell, Chairman of Swiss Re America
What happened to Robert Wooley?
The White Collar Crime Panel:
Walter Bell, Chairman of Swiss Re America
Jay Barbour, Carroll, Warren & Parker
Lorrie Brouse, Regional Counsel, Allstate
Steve Iler, President, AIG Claims
Wade Sweat, Copeland, Cook, Taylor & Bush
The Policyholders, what policyholders? You mean those schmucks? Panel:
George Dale, Adams and Reese Continue reading “Be Sure to Mark Your Calendars….”
What’ll you do when you get lonely
And nobody’s waiting by your side?
You’ve been running and hiding much too long.
You know it’s just your foolish pride.
From the Wall Street Journal (subscription required):
A dozen life insurers have pending applications for aid from the government’s $700 billion Troubled Asset Relief Program, and the industry is expecting an answer to its request for a bank-style bailout in the coming weeks. The government so far hasn’t said whether insurers will be eligible for the program.
Life insurers have taken a beating in recent weeks. The Dow Jones Wilshire U.S. Life Insurance Index has fallen 59% since the beginning of the year, leaving it down 82% since its May 2007 all-time high. The Dow Jones Industrial Average has lost 21% year to date, off 51% since its October 2007 record.
Denial is a terrible thing and it appears either the WSJ reporters were suffering the affliction or they were fed a line of BS and didn’t check it as the story continues: Continue reading “State Regulated Insurers Come Groveling to Uncle Sam for Help”
Marketwatch has the story:
S&P said it lowered its counterparty credit and financial strength ratings on 10 groups of U.S. life insurers, and its counterparty credit ratings on seven U.S. life insurance holding companies.
“In response to the extreme pressures in the global economy, we recently published criteria that outlined the incremental stress analysis we are now applying to U.S. insurers’ bond holdings, commercial mortgages, and commercial mortgage-backed securities when we assess these companies’ capital adequacy,” S&P said.
The ratings firm added that, “Although today’s rating actions reflect our opinion of a general decline in the overall creditworthiness of the U.S. life insurance sector, we continue to believe the credit fundamentals of the life insurance industry are strong.”
Insurers affected by the ratings changes include Conseco Inc., which saw its counterparty credit rating cut to CCC, denoting very weak security characteristics. Genworth Financial Inc. saw its rating cut to BBB, denoting good but more likely to be affected by adverse business conditions than higher-rated insurers, while Hartford Financial Services Group Inc.’s rating was cut to BBB+
The S&P report, which can be found here if you sign up for a free account has many salacious tidbits backing what I’ve been saying for several weeks now on a topic we’ve blogged about for months beginning with Senate Majority Leader Harry Reid’s welcome here last fall. Here are some excerpts:
Standard & Poor’s also said that it placed its ratings on two groups of U.S. life insurers, one of which was also downgraded, on CreditWatch with negative implications. At the same time, Standard & Poor’s revised its outlook on an additional U.S. life insurer to negative from stable……………. Continue reading “BREAKING: S&P Downgrades 10 Life Insurers. Death Rattles Reportedly Heard in Hartford Connecticut”
The Hartford’s President/COO thinks now is a good time to skedaddle but cry not for Tom Marra as he leaves still very well stocked with freebie stock. At least the HIG shareholders that lost their rear ends have the pleasure of knowing his option gun is worthless. Next stop, probably through the revolving door to the Connecticut DOI as it’s time for Mr Sullivan to recycle back to the Hartford. So far no word yet from Connecticut DOI on how well counting deferred tax assets as tangible capital is working out for consumers there. The market’s verdict is decidedly a big two thumbs down.
The sun will come up tomorrow and the next day. Still in all working at AIG, Swiss Re or the Hartford these days must really suck, kind of like Chinese water torture.
AIG – 60 Billion tax dollars really wasn’t enough.
ALL – Down another 7+% with a new 52 week low.
Swiss Re – See earlier post.
Hartford –Working on a new 52 week low and worse.