Insurer
A financial entity that pools risk and provides insurance coverage to individuals and organizations.
The Case for Mutual Insurance Companies
The best interests of financial services consumers are much better aligned with a mutual insurance company than a stock insurance company.
Mutual insurance companies are owned by policyholders. Owners of an insurance contract issued by a mutual company are both customers and owners of the insurance company.
Stock-based insurance companies are owned by shareholders, so their focus is divided between customers and shareholders.
Mutual insurance companies are a form of cooperative where individuals voluntarily associate to form an organization that serves the mutual...
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Are Inflation Adjusted Annuities Worth the Cost?
Inflation protection for fixed annuities would seem to be a sensible consideration given the fact that central banks around the world are doing everything they can to reflate in the wake of an historic deleveraging.
After all, the worst possible place to be if and when inflation does kick-in is on the receiving end of nominal (not adjusted for inflation) fixed payments, and most fixed annuities fit this description perfectly.
While the inflation protection makes sense in theory, it turns-out that inflation-protected annuities may not be so sensible in practice....
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Short-Term Focus has Adverse Impact on Retirement Income Product Development
Warren Buffett’s most recent shareholder letter focuses on the merits of productive assets such as equities in light of the current low interest rate environment and the potential for future inflation.
Buffett’s view is that although productive assets are variable and volatile, they are more likely to preserve future purchasing power than the fixed or currency-based alternatives.
Buffett’s advice would seem to provide a key...
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British Insurers Advocate Comparison Shopping for Annuities
The Association of British Insurers announced that the organization will adopt a new code of conduct that could have a meaningful impact on annuity sales. The decision is in response to criticisms of annuity industry sales processes. Critics have argued that current industry practices are inconsistent and opaque, and that this confusing annuity shopping environment ends-up costing financial services consumers real money. A recent report published by a British pension group suggests that current...
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