Insurance Quotes & Advice

Yesterday in the personal finance section, I talked about how the sub prime mortgage crisis is affecting the financial sector. Well it is also having a large affect on the insurance industry as the two are inter-related. Some analysts are predicting that you may see large losses being reported in the near future by some big insurance names.

Mortgage lending plays a large role in the insurance industry. They are an integral part of the underwriting business. Insurance firms are also some of the largest institutional investors out there and as part of their portfolios some have significant holdings in the securitized loans market.

Now typically an insurance company’s investment portfolio is made up of so called “safe” investments. But over the past year credit rating agencies have come under fire over their risk assessment of the mortgage backed securities industry. This has caused some companies to have an over exposure to amount of risk they would normally want to take on.

Now while no one is predicting imminent financial collapse for these companies this may have a significant effect on some individuals. Those with cash value life insurance policies and variable annuities whose values are tied to their company’s investments may not like what they see when they get their next statements.