alpha_zeta's  Instablog

AEG (and ING): very nice that you say the company plans to increase its ROE a little, but "How?" is not stated.

In a low interest rate environment, the absolute yields are low and expenses cannot continue to be reduced, therefore shrinking investment margins are the norm.

So, sell more volume you say?

Now look at the risk based capital that must be posted :
a) US regulatory - NAIC
b) rating agency- S&P, Moody's, Fitch, etc
c) European regulatory -- uh oh, whammmmo - look how much higher this cost is for some product lines sold by AEG (and ING )

Solvency II is analogous to a "180 degree regulatory arbitrage", likely causing more strategic reviews of their businesses.

Could the Europeans eventually divest some of their USA insurance operations? (in addition to the banking and reinsurance) AEG (and ING): very nice that you say the company plans to increase its ROE a little, but "How?" is not stated.

In a low interest rate environment, the absolute yields are low and expenses cannot continue to be reduced, therefore shrinking investment margins are the norm.

So, sell more volume you say?

Now look at the risk based capital that must be posted :
a) US regulatory - NAIC
b) rating agency- S&P, Moody's, Fitch, etc
c) European regulatory -- uh oh, whammmmo - look how much higher this cost is for some product lines sold by AEG (and ING )

Solvency II is analogous to a "180 degree regulatory arbitrage", likely causing more strategic reviews of their businesses.

Could the Europeans eventually divest some of their USA insurance operations? (in addition to the banking and reinsurance)