Chris B

Life Insurers Face 'Unprecedented Stress' - S&P

Of course, anybody who owns bonds or other fixed income securities is underwater right now because of market prices. However, those securities are still producing cash to some extent (default rates still <10%).

Banks have been sunk because they have had to mark these paper losses as negative income and balance sheet reductions, even for securities that have low default rates. The rules for insurance companies (AIG aside) are less clear. If they are able to hold their securities to maturity rather than being forced to sell at below PV, they might turn out to be great for investors. I suspect that the premium-collecting nature of life insurance companies, coupled with the predictability of their expenses, will allow them to do exactly that.

Tough Times for Dividend Investors

Dividends are being cut because they don't make business sense right now.

Today's "dividend aristocrats" are increasingly the companies who chose to take on (or maintain) debt at ~7-10% to pay dividends to their investors, who are in turn earning 2% on those dividends in money market and bank accounts. Those investors are doing the equivalent of borrowing from the bank to earn interest in a savings account.

That math just doesn't compute for me.

Insurance Industry in 2009: Race for Survival

I wish I had acted on this article when it came out.