FIG trader_

AIG: Another Bear Stearns?

Thanks for the absolutely brilliant insight

Break Up AIG!

Like usual your comments are long on useless advice but short on any meaningful analysis. At the very lows for the stock in more than a decade you recommend changes and start poo-poo-ing Hank, blaming him for the mess, 80% of which is due to bad investment decisions made on mortgage bets post Hank. Say what you want about him, but his investment and ROE track record is second to none (actually second only to AFLAC) You say ROA is more important than ROE for insurers? You're kidding right? ROE may not say much about risk at any point in time, but it wasn't Hank that took the huge writedown just now. ROA is meaningless for comparative purposes, given the difference in p/c (and across lines) and life insurance companies asset/liability mix.
Even for the "excesses" of what he was responsible for, the impact on ROE and BV (book value) growth was almost negligible when averaged over his tenure. Sure any cheating on reserves is a no-no, and he probably did less than any competitors save BRKA among the ten majors. Look at the triangles (yellow books or 10K's )going back decades. And just remember you has the better chance of going into the slammer. Hank or Elliot?
You defer to the rating agencies???? No comment needed.
You also talk about not a fun place to work, and talk about longevity. Who ever said, these were charity organizations; certainly you can't be writing for investors given the longevity of personnel at investment firms
.
You say the problems at AIG are bigger? Please do tell?
And Sullivan can't deal with them. For this latter one, I will give you credit. That's right he can't. And one thing you can be sure of is that probably only one person can and will do the most for agitating and getting the stock higher (we are certainly at or near the low). That is Hank. Where are you Hank when they need you the most?

Insurance Stocks: Wall Street's Biggest Secret

I would agree that insurers like most financials have a license (state) to steal, but I would add some caveats. First, they have had some signifinicant rough patches in which they under-earned most financials by a wide margin, based on returns on capital and equity. The real issue is timing, since most people aren't waiting 30 years to find out. Don't mean to rain on the parade, but we are currently in one of those "high risk" periods, with the stocks discounting lower returns, but not the degradation mostly likely to come down the pike. Read HIG's CEO's comments to see what I mean, and look at the historical cyclicality in earnings for the industry. Its quite possible that in 3/4 years, they will be breakeven because of the severity of the downswing and under-pricing currently. Nobody ever wants to go to the video tape, but it happens every ten years or so. You mentioned some big winners (AFL, PGR AIG) obvious, but more money will be made on the short side of BER, PHLY, and ZNT in next 5 years (just retracing last 5 years up and probably going back to book ). It looks like the "top out" parade has begun in the whole financials group, though we could have one more burst to the upside.