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As a former employee, I found this interesting:
AIG names new CEO, plans to spin off life and retirement unit
AIG names new CEO, plans to spin off life and retirement unit
AIG spinning off their life & retirement business
- Thread starter shonceman
- Start date
- 4,545
will be interesting, but probably realizing some of their aggressive pricing assumptions are not going to play out real well going forward in the current interest rate environment & have been & will be a drag on their overall bottom line. ironically, they seemed to have been the the one buying other carriers or blocks of policies over the years
Woody Woodson is spinning in his grave
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What? He died? Pretty sure he is traveling the country in full time ministry. Unless you are talking about a different woody woodson. Lol
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- #5
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Haha! This Woody Woodson:
Woody Woodson Remembered | ThinkAdvisor
His column was the one thing I faithfully read in Life Association News. Industry giant. I wasn’t there when he was head of American General. I wish I had been.
I was an Associate Manager on the day the merger was supposed to happen with Prudential PLC (the British company). We looked forward to that merger, as they seemed to be a company with similar roots and vision. It was pretty jarring to get to the office that day only to learn that we were instead being acquired by AIG through a hostile takeover. They left us alone for about a year, but started radically changing things on us soon enough. We felt like we’d been assimilated by the Borg Collective! (The other sci-fi geeks know what I mean!
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They should rename it something catchy and fresh...like, SunAmerica.
Benjamin "Woody" Woodson is not part of the Walking Dead, or Zombies for Jesus.
I predict we will see much more of this. Every life company is going to be in a very bad place and probably need a bailout to remain afloat with these interest rates, and that includes ALL of them and probably especially the mutual who have no way to raise capital.
The Fed's 'low rates forever' approach to "save the economy" will destroy large swaths of it and insurance companies are just one part.
The Fed's 'low rates forever' approach to "save the economy" will destroy large swaths of it and insurance companies are just one part.
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Not sure about this. But I can see that business will change. Some companies have rolled out new products that ensure less risk is covered. Loose underwriting will also see an overhaul... this is happening now.
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Mutuals issue Bonds to raise capital. And that is the main method publicly held carriers raise capital as well once they are large established companies with huge market caps.
Companies cant always issue shares at will. Even if they can, it doesnt mean issuing shares is going to be a good thing financially. It brings immediate cash, but it dilutes the stock.. which causes their net assets to drop... which will cause them to need even more money to keep reserve ratios in line.
Also, in a crashing market, issuing shares does no good if there arent institutional buyers willing to purchase that large of an amount... which is not a likely scenario if the economy is at the point of AA & AAA rated insurers collapsing.
Then there is the problem of issuing shares at a deflated price in a collapsing market. It not only brings in a very small amount compared to assets, but it also could create fiduciary issues on pricing the offering.
So just because they can issue shares, doesnt mean they should, or that it would bring in an substantial amount of money.
In that type of situation, Bonds would be looked to by major institutions instead of stock, since they are higher in line to recover assets if the company goes bust.
