by joven222 » Tue Jan 13, 2009 04:44 pm
Hi Guys,
I am not from the US so I would like to ask this question. We all know that US is currently on its economic recession. What would happened to the insurance industry because of this? Can economic crisis affect the Insurance industry? If yes, in what way?
I am not from the US so I would like to ask this question. We all know that US is currently on its economic recession. What would happened to the insurance industry because of this? Can economic crisis affect the Insurance industry? If yes, in what way?
Posted: Tue Jan 13, 2009 11:55 pm Post Subject:
As I understand it, it's a world recession.
It affects insurance companies very much so as they rely in investing premiums in order to pay claims and make a profit.
Posted: Wed Jan 14, 2009 12:28 am Post Subject:
It really is a world recession. What happens if an insurance company fails? Say there are claims out there, paid premiums, or anything of the sort. What will happen to those type of things?
Posted: Wed Jan 14, 2009 12:31 am Post Subject:
joven222,
Are you an insurance agent? I see your posts in different forums and your signature is linked to an insurance quote engine.
Are you prospecting or just seeking material to publish elsewhere?
Posted: Wed Jan 14, 2009 04:49 am Post Subject:
As I understand it, it's a world recession.
Yeah, quite so but I doubt if the other parts of the world has suffered as much the US economy. In fact, IMO, that the world economy is kinda forced into this recession due of the failure of USA money market.
Joven, The insurance industry is still weathering the crisis, but it would succumb like any other financial industry if we don't take any immediate step to improve the situation.
The indexed annuity market is the worst affected one. Several people have lost grands on their pension funds. It may reduce the popularity of the indexed plans in the coming days.
Posted: Sat Jan 17, 2009 12:59 am Post Subject:
I would think in times like this the bogus claims would be up also, in rough times people do some weird things to get money, I have known people to "accidently" fall down a family members steps to collect on homeowners insurance. I would be interested in knowing if these stats are on the rise or not.
Posted: Sat Jan 17, 2009 09:26 am Post Subject:
I'd also agree with both tcope and anonymous12 at describing it as a global recession. Like every other finance industry the insurance industry should also share the brunt. But remembering the volume of operations, we'd be assured of a lesser impact on this industry compared to its contemporaries.
Posted: Sun Jan 18, 2009 01:41 am Post Subject:
anonymous 12 wrote:
The indexed annuity market is the worst affected one. Several people have lost grands on their pension funds. It may reduce the popularity of the indexed plans in the coming days.
You are confused with the facts.
NOT one Indexed Annuity client has lost one dime in an Indexed Annuity.
You have confused Indexed Annuities with Variable Annuities.
Variable Annuities are sold by Broker-Dealers and their certified clueless clown Registered Representatives who had to get an insurance license to be able to sell the infamous bloated pig with lipstick known as a Variable Annuity with little or no insurance experience.
Indexed Annuities are FIXED Annuities with the interest credits tied to an outside index such as the S&P 500 but not one dime of the client's principal is at risk with the day traders playing stocks like a flea market swap meet. See graphic below.
The absolute worst thing that happens to a client's money in a Fixed Indexed Annuity is they would get 0% interest credits in a flat or down market with all principal SAFE and sound.
The Broker-Dealers and their certified clueless clown Registered Representatives have lost about 25% to 40% of their client's portfolio in 2008.
That money will NEVER be made back for anyone age 65 and older and even if they did make it back in ten years they would have effectively had zero growth on their money for 10 years.
Posted: Sun Jan 18, 2009 10:56 am Post Subject:
Okay, now that we have the facts on the table let's talk about banking buffoons and Wall St. fraud.
In 1999 President Clinton signed the Financial Services and Modernization Act which "sounds good" on paper but in practical application it's a disaster for consumers.
See THIS LINK
On November 4, 1999, Congress passed sweeping legislation that will dramatically reshape the financial services industry by removing barriers between banks, insurance companies, and investment firms which have existed since the Great Depression. President Clinton is expected to sign this historic legislation.
So in less than ten years after this historic legislation was made law and the "Universal Banking Business Model" was developed and adopted both Wall St. and the banking industry are bankrupt AGAIN and for the exact same reasons the banks and Wall St. crashed in 1929.
The so-called "financial advisor" at Wachovia, Washington Mutual, Citibank, Bank of America and other now broke bass towards are the same clueless clowns who recommend you NOT "waste" your home equity and describes it as a DEAD ASSET.
It's these brain dead financial buffoons who suggests the bank make you a home equity loan or refinance your home and pull your cash out.
The bank makes money when you do this and so does their financial guy. Of course now that the bank's in house financial fox has found money this same jack assterisk will recommend you put that money into stocks, mutual funds or variable annuities because you'll make out like Bernard Madoff because the interest on your bank loan is less than what you'll make in the market and you'll get to keep the spread. Sound good?
Of course these jokers at the bank never quite get around to explaining how you're going to repay the principal and they NEVER talk about if the market declines for two or three years how you'll service your debt since you've lost 40% of the principal.
There used to be and there should be very high walls separating banking, investment firms and insurance companies so each entity competes for your investment dollars. I can readily assure you the financial advice you get from a banker, an investment firm or an insurance advisor is totally different.
The "Universal Banking Business Model" is like having the Mafia running state lotteries.
From the link above:
Eliminates many Federal and State legal barriers to affiliations among banks and securities firms, insurance companies, and other financial service providers, including provisions of the Bank Holding Company Act of 1956 and Section 20 of the Banking Act of 1933 (commonly referred to as the "Glass-Steagall Act"). Full affiliation can now occur between the entities
The Glass-Steagall Act was put into place after the Great Depression to PREVENT the exact type of financial fiasco we have right now in the USA.
You simply can't have banks who loan money also be the same entity that advises the same person where that same money could be invested, just like you can't have the Mafia running state lotteries.
Posted: Sun Jan 18, 2009 03:50 pm Post Subject:
Can economic crisis affect the Insurance industry?
Oh yes...If yes, in what way?
All of the larger carriers I know about lost a lot of money, (ie fannie, and freddie and others)...also all of the larger carriers i know (in the claims and other depts...NOT sales) have hiring freezes, and layoffs going on...Goodnatured..I would be interested in knowing if these stats are on the rise or not.
I've been in this biz for over 20 years...in all that time, about one out of about 15 or 20 'tried to get something they didn't have coming'...when the economy tanked and gas prices hit the roof, it took a turn i have never seen in all my years, now easily 5 out ten, and i'd say more like 7 out of ten try to get 'something' that is not related...i've never ever seen it like this..(remember I only handle auto claims now so I'd assume the HO claims are as bad or worse) claims for the most part have been down since the economical down turn....people just are not driving as much as they did prior to the gas (and everything else) price jumps, although gas has dropped there is (apparently) no confidence that it will stay that way.Posted: Sun Jan 18, 2009 05:57 pm Post Subject:
Gary, how much do you know about Wendy Gramm?
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