Gloria Vogel

TARP for Insurers: Blessing or a Curse?

Agreed that most insurers were not like AIG. However, many do hold sub-prime or Alt-A mortgages, and some have securities lending operations or commercial mortgage loans that are having difficulty.


On Apr 09 05:36 PM p2i wrote:

> Gloria, not all the insurers were as stupid as AIG in allowing one
> division to bring the whole company down. AIG sold credit default
> swaps and lost billions in the housing meltdown. You describe the
> listed insurers as buyers of "toxic assets". Most of the insurers
> assets are not toxic at all; they are merely devalued due to economic
> events. They hold 18% of all investment grade corporate bonds. Those
> bonds have gone down in value. Does that make them toxic or temporarily
> devalued? It doesn't matter thou since most of the bonds will not
> default and were bought to hold until maturity. They invest in many
> other temporarily devalued assets too which won't default. Some insurers
> do have liquidity problems at this time, but not all.