All GLG News Analyses Filed Under: Insurance & Risk Management
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
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Soft Insurance Market Set to Slide Further Towards A Hard Landing
August 19, 2008
Japan Insurers Look Abroad as Profits, Premiums Drop | www.bloomberg.com
Reduced insurer profits. Reduced insurer shareholder return on equity. Higher insurance premiums in near future. Increased insurer M&A activity. Maybe time to buy insurer stock.
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Japanese Insurance Carriers are denied Growth Opportunities In their Domestic Markets!
August 18, 2008
Japan Insurers Look Abroad as Profits, Premiums Drop | www.bloomberg.com
Imlpications: 1.An appearance of the Lack of Economic Growth Opportunities in the Domestic Markerplace has caused a drop in premiums and, hence, profits. 2.The two (2) salient issues the demographic changes in population and economic growth. 3.A rapidly aging in the country's population may be the motivating factor for considerations given to the conversion to stock ownership to enhance finance acquisitions. 4.The most dramatic changes that would cause a problem of this magnitude: 1. A declining birthrate, 2.This decline will result in a reduction for the demand for insurance - hence, a reduction and profit. 5. The domestic marketplace in this country is stagnating and , as a consequence, a 'New " growth strategy will be difficult to achieve. 6. The key to success will be cost effectiveness,risk management and, the diversification of earnings.
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Nitish GroverPrincipal, OwnerNitish Grover and Associates
Accounting, Risk Mangement , Inflationary Fears and Central Bank Policy - A Look at Some Aspects
August 11, 2008
Inflation Fears Persist as Fed Holds Rates | www.ft.com
Confused Central Banks are making risk management confusing while making it difficult to value derivatives and evaluate the impact of hedging strategies. As a result accounting is becoming more complex especially in relation to the manner in which assets and liabilities are required to be valued in relation to annual financial statements. This analysis looks at some of the concepts involved in this paradigm.
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Bond Insurer Rescue ??....OPEN ISSUES...just around the corner...
August 6, 2008
Merrill, XL to bail out struggling bond insurer | www.reuters.com
Merrill Lynch and XL, Citigroup and Ambac "Commutations" illustrate problem of blindly applying P&C Insurance concept to CREDIT risk and the CAPITAL MARKETS. Grappling with one issue at a time, in separate policies, silos and islands DOES NOT solve the problem, when they are ALL tightly related. It's all about CREDIT [NOT "insurance"]. Like Merril and SCA, AMBAC paid $850 million to be relieved of $1.4 B CDS exposure. HOWEVER: what about the rest of Ambac's $250 B Structured Finance portfolio? Whether in Financial Guaranty OR CDS form ..."economics over policy form, accounting".
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Will ING open next Central Eastern Europe home market?
July 21, 2008
ING get approval for Ukrainian life insurance | www.bankingtimes.co.uk
After some hesitation in the past ING is ready to step up the next Central Eastern European market place. After successful entrance of their perceived third European home market Poland (after the Netherlands and Belgium), ING is now ready for the next phase.
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July 14, 2008
P/C Insurers Still Above Water After 2008 Midwest Floods: S&P | www.insuranceassetmanager.com
Will The Mid-West Floods Of Early Summer Negatively Affect Crop Futures?
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Wrong Solution By The Wrong People In the Wrong Way At The Wrong Time
July 3, 2008
AMA meeting: Delegates decry CMS no-pay list as unrealistic and call for revision | www.ama-assn.org
Somehow, healthcare, energy, education....in fact nearly every major issue today has turned into a contentious "them vs. us". It would always be preferable that reasonable men attempt to reach a reasonable conclusion, but government bodies today (eg., politicians and key administrators) are NEVER reasonable....certainly authoritarian, typically dictatorial, and always overreaching their authority. Most of the people setting rules at CMS are bureaucrats who even if they mean well in attempting to control healthcare costs are nothing more than myopic statisticians who rely almost exclusively on numbers and computer models to drive policy, rather than knowledge of healthcare, common sense, awareness of policy effect on the sector, and God forbid, the facts. Not that the medical community are saints, but more is deserved here than driving a square peg into a round hole.
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Missing Earnings in Turbulent Times Hospital and Medical Insurers
July 3, 2008
AMA meeting: Delegates decry CMS no-pay list as unrealistic and call for revision | www.ama-assn.org
CMS (and several large insurers) refusing to pay for "Never Events" will further challenge cash strapped hospitals, and poses increased pressure to increase prices as hospitals attempt to cost-shift to the commercial carriers. Not paying for alleged hospital mistakes will garner stronger administrative action against staff and doctors who get more adverse high cost patients. The world of doctors will get more autocratic. Hospitals cannot change Medicare and Medicaid fee schedules, but they can and do change commercial fee schedules. Insurers need to stay on top of unexpected cost increases predicated upon unexpected and desperate hospital trying to keep the status quo on the backs of the commercially insured members. Staying tuned to what the government subsidizes is the name of the game for successful insurers and providers of care.
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The public no longer needs state run insurance programs as competition has returned
June 30, 2008
Growth of State-Run Property Insurance Plans Flattens | usinsurancenews.com
FAIR Plans are no longer the only carrier in business.
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AIG CEO Shakeup - A.M. Best - Will Other Insurance CEOs Be Exposed?
June 30, 2008
AIG CEO Shakeup Leads Best To Downgrade Life Units | www.propertyandcasualtyinsurancenews.com
Best said it believes AIG needs to embark on a companywide strategic and operational review of its businesses. Every time the tide recedes we find out who was enjoying a cocktail while their swimsuit floated off. Companies are required to have an annual financial audit. Why doesn't every CEO, either selfishly for job security or intelligently from a core leadership skill, demand an Annual Internal Operational Audit?
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