“There’s something wrong with us, something very, very wrong with us. Something seriously wrong with us . . .”
— Bill Murray, Stripes
Based on the steady stream of bad news, you’d think Bill Murray was addressing top managers of America’s biggest insurance companies – rather than the misfits and assorted losers of his fictitious 1981 army platoon. If you don’t see the similarity, take a look at a recap of recent industry news and see if you don’t draw the same conclusion that there is something very, very wrong with the current health of the insurance industry and the culprits who made it all possible:
• The 24-stock KBW Insurance Index fell 48 percent in 2008, with MetLife down 43 percent, Prudential off 67 percent and Hartford plummeting 81 percent.
• A.M. Best Company, the primary rating agency for the insurance industry, downgraded 43 companies and issued only 14 upgrades. In the annuity sector Best issued 31 downgrades and only eight upgrades.
• AIG, one of the largest, highest rated and most respected companies in the industry pleads for, and receives, $150 billion in government funds, just to stay in business (the company is now effectively under the control of the government). Continue reading