Insurance Quotes & Advice

Now that the banking system is getting relief from the federal government, there are also a few companies in the insurance industry that want to access that large pool of capital.  The CEO of Ace Limited however has criticized his fellow counterparts saying it’s wrong for them to seek taxpayer funds.

“Taxpayers should be a last resort rather than a cheap source of capital … We’ll row our own boat,” Greenberg said Wednesday on a call with investors after the insurer reported quarterly results that topped Wall Street expectations.

Under that scenario, “perfectly healthy insurers may well have to (participate) … in order to compete with companies that do … it will become a general government capital subsidy rather than a means of crisis correction,” he wrote to Paulson.

Ignoring the massive federal loan required by AIG, the most troubled sector has been bond insurance.  It’s losses have caused untold havoc for the bond market and a number of municipalities across the country.

As the financial crisis worsens and the housing slump grows deeper, mounting losses for the sector and the likelihood of further ratings downgrades may force their hand.  A bailout may become a necessity for them but where does the government draw the line.

Mortgage insurance is another troubled sector, tied closely to the falling housing market that could also see it’s fortunes worsen over the next year.  Insurance companies across all sectors are taking a beating to their typically large investment portfolios.

Is the government to take equity stakes in all these companies in exchange for a cheap source of capital?  We all know that government oversight and regulation will be increased when everything is said and done but with the equity exchange for capital precedent that has already been set, are we slowly turning into a state run financial system. 

I don’t think this is what Congress had in mind when they begrudgingly voted to rescue the financial system.  This is not how a free market system is supposed to work.

Property insurers took a beating in the 3rd quarter mostly due to an active tropical season in the Atlantic.  The difficult quarter couldn’t have come at a worse time for the struggling industry.

U.S. property/casualty insurers are expected to pay homeowners and businesses an estimated $11.5 billion for third-quarter property losses resulting from a total of 11 catastrophes in 22 states — the fourth-largest insured property loss in a third quarter since 1998, according to preliminary analysis by ISO’s Property Claim Services (PCS) unit.

PCS estimates the 11 catastrophes of third-quarter 2008 generated 1.7 million claims. Of the 11 catastrophes, six were caused by severe weather (wind, hail, tornadoes, and flooding) and five were caused by tropical systems.

The insurance industry is entering a rocky period where significant losses on the financial front are beginning to mount as well.  Widespread ratings downgrades are expected across numerous sectors in the near future.

It was definitely an interesting hurricane season which saw over 2 million people evacuated from both the Houston and New Orleans coastal areas.  Although none of the storms could be classed as a Katrina like event, when taken together they cost the industry a considerable amount of money.

Although the Atlantic hurricane season is winding down there is the possibility of further tropical activity.  Then the start of the winter season for the Midwest and Northeast always gets interesting.

While the economy is what most Americans are primarily worried about these days, the looming question about healthcare still remains. The outcome  of next month’ elections may very well determine the course of the nation’s healthcare system for the next decade and beyond.

While each candidate has markedly different proposals on how they would implement healthcare in this country, neither has any solution on the main reason why premiums are rising so fast, namely skyrocketing medical costs.  Their plans mainly center on how they would implement insurance coverage and on ways to pay for them.

With the federal government already spending obscene amounts of money attempting to solve the financial crisis, nearly $2 trillion already, how much will Congress be willing to allocate to healthcare in the next few years.  Something also to consider is that AIG is not the only struggling insurer and that the insurance industry may very well require it’s own bailout package before every thing is said and done.

Only one state in the country, Massachusetts, has made an attempt at installing universal healthcare coverage.  While some believed they may act as a model for other states to follow, Massachusetts is quickly finding out that it is much more expensive than originally thought.

In order to fund their healthcare program, the state has had to raise cigarette taxes as well as turn to the government for federal assistance.  At this point it is still uncertain if the their attempt will have any long term success.

Until something is done to try to control rising medical costs, there is just no way you can reasonably attempt to control rising insurance premiums, it’s impossible, the two go hand in hand.