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 →

On the surface, the U.S. property and casualty (P&C) insurance industry received good news on Valentine’s Day, during Chinese Vice President Xi Jinping’s visit to the United States. U.S. Vice President Joe Biden announced the “Joint Fact Sheet on Strengthening U.S-China Economic Relations,” under which China agreed to open up its US$65 billion auto insurance market to foreign competition. The Chinese insurance market had 2010 annual premiums exceeding US$236 billion, including US$150 billion in life and US$86 billion in P&C, of which foreign life and general insurers hold insignificant market shares of roughly 4% and 1%, respectively. Non-China-based insurers, originally lured to … 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 →

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 →

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 →

I talked to a friend of mine the other day, a life insurance producer who plays in the big leagues. “You wanna know what we’re up to these days?” He asks me. “Sure,” I say. So he tells me that, with the federal estate tax exclusion set at US$5 million per person as of December 2010 and the gift tax harmonized with that for the first time since 2001 (translation — anyone can now give a total of US$5 million over their lifetime without gift taxes kicking in), high-end producers have a new sales scheme: They are going around to the … Continue Reading →