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7 Insurers on My Shopping List

Comments:
1. Cheap can get not only cheaper, but much cheaper

2. Buffett buys Property/Casualty (P&C) insurance companies. Could it have anything to do with:

a) higher ROE (long-term nature of life insurance and heavier capital requirements has meant low ROE's for the past several years. Trying for an ROE of 15% in life insurance, as the insurers have even tried? look elsewhere)

b) P&C insurance contracts are short-term; you;re done with the contract (essentially) at the end of the year

c) if you made a mistake in one year on the pricing, the next year you can increase prices

d) one year coverages means P&C insurers don;t have to invest in all those long-term bonds [remember that people are concerned about inflation down the road? so when inflation occurs and rates rise, price of the bond falls. of course insurers will say we're holding to maturity...yet many things can happen in the 30 years of holding a bond to maturity (interest rates rising, credit defaults, etc).

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Moving on to Variable Annuities(VA) (not typically written by predominantly-P&C companies...ACE is one exception), should I re-post details about concerns/issues about variable annuities?

Re USA vs non-USA companies, except for LFC all of the companies you mention have operations and write VA policies in the USA and must comply with USA reservinig and capital requirements on that USA business.

But with the non-USA parent companies, there are reserving and capital requirements of other countries to be considered. You mention AXA, AZ, MFC and SLF, so are the reserving and capital requirements of France, Germany, Canada weaker or stronger than USA standards and have these been employed?

And the National Post article yesterday was quite informing about MFC's issues.
www.financialpost.com/...