Gloria Vogel's  Instablog

 

As top executives of global reinsurers gathered in Monte Carlo this weekend for their annual Rendez-Vous, the outlook was cloudy despite the Mediterranean sun. Atlantic hurricane activity so far this year has been modest, while California firestorms rage, but the cost to the industry from these events will not be enough to stimulate higher rates. However, there is still plenty of potential for storm activity ahead, not just from the weather.

 

Although reinsurer investment portfolios were hit hard over the past year, most reinsurers escaped the brutal bloodbath taken by their banking brethren; in part this was due to strong insurance regulation governing investment activity, but it was also due to more limited exposure to structured products and subprime loans, especially on the non-life side of the business. Moreover, rebounding markets have helped restore some of the earlier hits taken by reinsurer investment portfolios. As noted recently in Business Insurance “sixteen major reinsurers surveyed by Guy Carpenter, which collectively reported a $3.5 billion loss for 2008’s first half, posted $4.6 billion in net income for this year’s first half, in large part because of a reduction in unrealized investment losses”.

During summer recess, Congressional leaders are hearing an earful from constituents about health insurance reform. In numerous town hall meetings around the nation, opponents of reform have emerged in large groups battling the proposals. President Obama vociferously argues that those opposed to his reform proposals are “spreading outlandish rumors and misleading information”, and the Administration blames Republican and industry backed groups and conservative talk-show hosts for “staging” the outcry. The White House is even asking that in order to track rumors, individuals should send information on any dissent to a new website: flag@whitehouse.gov.

Obama’s Health Insurance Plan Is No Panacea (AET, CI, UNH, WLP)

TRV, AIG, HIG, LNC, PRU, CSCO, GM,C, MMC. ALL