Insurance Companies

Rating agency A.M. Best has recently issued a report indicating that three insurance companies have become financially impaired thus far in 2009. A.M. Best considers an insurance company impaired once a state department of insurance has taken its first official regulatory action against the company. The three carriers considered impaired are: Shenandoah Life Insurance Company American Network Insurance Company Penn Treaty Network America Insurance Company A.M. Best indicated that more impaired...

Rating agency Moody's released a brief that expresses a bit of optimism regarding life and annuity insurance companies: "Even if markets turn sour again, life insurers and reinsurers are considered to be fit enough to weather the financial and economic crisis because of their solid balance sheets..." While Moody's indicated that additional ratings downgrades may result if market conditions worsen, their own stress tests indicate that companies should be able to maintain their investment...

There are fewer insurance companies offering equity indexed annuity products. Thirteen insurers have exited the market since the end of 2008. Included among the exits are some better known names such as Principal Financial Group, Genworth Financial, Transamerica , Monumental Life and Protective Life. Many of the companies exiting the market have equity indexed sales that are not a significant part of their overall business. Looming regulatory changes which would require that equity indexed...

Life insurance companies that have bank holding company status and applied for TARP funds prior to November 14 2008 will receive $22 billion in TARP funds from the U.S. Treasury. Companies that are set to receive funds include: Hartford Financial Services Group, Prudential Financial, Principal Financial Group, Lincoln National, Allstate and Ameriprise Financial. Many life insurers--particularly those with meaningful variable annuity businesses--have been significantly impacted by the capital...

Corporate pension plans face the real risk of having their plan participants live longer than what is projected by actuaries. In other words, similar to an individual who considers an annuity to offset the risk of outliving their assets in retirement, pension plans must deal with longevity risk . A new derivatives market is evolving to deal with longevity risk on an institutional scale. Many of the deals thus far have been between investment banks such as JP Morgan and insurance companies that...