Someone made the call a while ago, and look at the massive, sector-wide sell off today.
Lincoln National is getting crushed.
Lincoln National is getting crushed.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
3/30/09 - Life Insurance Companies getting HAMMERED
- Thread starter ByLoSellHi
- Start date
Quote from lrm21:
I was hoping to hang on to AFL.
Any thoughts as too why.
This article talks about the problems at AIG and also the life insurers, but this one sentence speaks volumes:
AIG crisis could be the tip of an insurance iceberg
The company's situation reflects problems throughout the life insurance industry as investments suffer. Further strain could bring about a second financial crisis.
By Ralph Vartabedian and Tom Hamburger
March 30, 2009
...
http://www.latimes.com/news/nationworld/nation/la-na-aig30-2009mar30,0,1747696.story
All these companies pretty much depend on their investment portfolio to sustain their capital ratios. I do believe insurance is regulated on a state by state basis, but they have to keep x % of cash to meet a certain % of their liabilities (as not everyone who is insured is going to die at one time), but a huge portion of their assets is invested in equity and bond markets at any give time.
It's more than just their assets. Their liabilities also have increased, because the annuities they kept selling a) are floored; b) need to be discounted using a much lower rate.
Along with CRE (commercial real estate), the insurance sector is the one, I think, where we haven't seen all the pain yet.
Along with CRE (commercial real estate), the insurance sector is the one, I think, where we haven't seen all the pain yet.
Quote from Martinghoul:
It's more than just their assets. Their liabilities also have increased, because the annuities they kept selling a) are floored; b) need to be discounted using a much lower rate.
Along with CRE (commercial real estate), the insurance sector is the one, I think, where we haven't seen all the pain yet.
I'm not sure even a single sector has seen all the pain yet.