Reading last Saturday’s Wall Street Journal story on the unclaimed life insurance policies of Holocaust victims brought to mind a friend of mine (a life insurance producer) who maintains that the financial press consistently presents the life insurance industry in a negative light. By and large, he’s right. The financial press does focus predominantly on scandals around life insurance. The last few years have seen coverage of the following: Insurers failing to write big checks to veterans’ widows, instead issuing checkbooks and holding assets in their own accounts, earning interest Insurers being insufficiently proactive in tracking down decedents who owned life policies … Continue Reading →

Friday’s news that North Carolina-based BB&T would acquire Roseland, New Jersey-based The Crump Group for US$570 million signals a further heating of the already warm space of insurance-distribution M&A. Already the nation’s second-largest bank-owned insurance broker, BB&T Insurance Services will become the largest independent U.S. wholesale distributor of life insurance and a strong number two in wholesale P&C insurance after acquiring Crump. Bank insurance has been something of a sleepy domain in the United States, which has never seen “successful” bancassurance behemoths like ING or Fortis (whoops!) take root. All of Sanford Weill’s wiles could not keep the banking and … Continue Reading →

Prudential Financial yesterday announced a multistate settlement concerning death-benefits-matching. Like other insurers, Prudential had come under pressure from regulators for failing to do all it could to determine whether the insureds on its life insurance policies remained among the living or had died, the latter of which would necessitate the paying out of a death benefit. At the same time, Prudential’s annuities lines of business, which were able to stop paying out annuities when the annuitant passed away, worked very hard to stay on top of that data point. I have argued in the past that, in the absence of … Continue Reading →

Is it just me, or does it strike anyone else as ironic that health insurers Aetna and Humana have reported results for Q3 2011 that benefit from consumers’ lower utilization of healthcare services while there’s a debate as to whether Steve Jobs’ failure to seek proper treatment for his cancer hastened his demise? To return to the first point, the Wall Street Journal today reported that “Humana’s medical-cost ratio, the percentage of premium revenue used to pay medical bills, fell to 80.7% from 81.6% a year earlier and 82.2% in the second quarter. Health insurers have benefited as economic turbulence … Continue Reading →

Some three years ago AIG became a household name on account of the antics of AIG Financial Products — antics that were most inconveniently overlooked by a senior management seemingly incapable of understanding what was going on there, regulators who were equally incapable of doing so, and derivatives market counterparties who should have understood what was going on, but apparently found it amusing to pass the buck all the way to the edge of the precipice only to be made whole  by the sanctity of contract under the Troubled Asset Relief Program (TARP). Since then, AIG has rebranded a number … Continue Reading →

In July 2011 Aite Group had the opportunity to sit with Maurice R. Greenberg — chairman and CEO of C.V. Starr & Co. Inc. and the Starr Companies. — and discuss with him topics of concern to the insurance industry and the financial community. What follows is a transcript of the conversation, which touches on topics such as building a culture of underwriting, perceiving and responding to future risks, and doing business in China. The discussion should be of interest to a broad range of participants in the worldwide insurance industry. Aite Group: Let’s talk in a forward-looking way about … Continue Reading →

With renewal time coming around on both my homeowner’s and my auto insurance, I decided it was time to go shopping. My home has been covered for years by a small Midwestern mutual that’s got an office in my mom’s hometown with which we’ve done business for decades, and the agent there had been clamoring for an opportunity to bid for my auto coverage, which has been with one of the bigger carriers whose ads alternately amuse and bore us nightly. I was thinking “you’ll never beat their rates.” But I called her up and went through the quoting process … Continue Reading →

On the heels of a disappointing earnings announcement, State Street on July 19 announced its intent to cut 850 jobs. This comes on the heels of similar announcements by Goldman Sachs and Credit Suisse. Meanwhile, people on Wall Street are quietly becoming accustomed to living on less money than they once did. One friend at the private bank unit of a bulge bracket bank recently estimated that most of his Manhattan colleagues are making 55% to 60% of what they used to. In the life insurance world, post-crisis retrenchment has been most visible in the exiting of carriers from product … Continue Reading →

Time was when there were basically two types of firms offering automated underwriting (AUW) solutions for life insurers: reinsurers and software vendors. Though convergence between the two had been noted as early as Munich Re’s acquisition of AllFinanz in 2007, things have heated up of late. After PlanetSoft and Swiss Re went to market in 2010 with their LifeGuideSI solution, targeted at the simplified issue market, the AHOU (The Association of Home Office Underwriters) conference last week saw the software vendor and reinsurer announce a deepening of their relationship with the plasma solution, which marries the strengths of Swiss Re’s … Continue Reading →

The Wall Street Journal has published a series of articles in recent days about how some life insurers have failed to pay out death benefits in a timely fashion of late. Yesterday’s article,  ”Life Insurers Skimp on Payouts: States,” contains the seemingly damning assertion that life insurance business units have failed to pay out death benefits for insureds where annuity business units have ceased making annuity payments for the same person. This does sound bad. The fact is, however, that life insurance and annuity business units operate as separate profit centers within life insurers; they operate on different policy administration … Continue Reading →