The financial condition of many Insurance Companies appears precarious this day. Many different lines of Insurance and the Companies which are in the business of making money from issuing Policies along those lines, all seem to be represented in the class of companies incurring financial adversities.
Hartford Financial Services is repurchasing $500 Million of its own shares, reflecting a good financial condition, but Hartford released other news simultaneously which does not at all reflect a good financial condition. For example, Hartford announced that its 2Q 2011 net income is down 68% from 2Q 2010, due heavily to Catastrophe Claims from Natural Disasters. See Erik Holm, Joan E. Solsman, and Mia Lamar, "Insurance / Buyback From Hartford; Prudential Earnings Rise" p. C2, col. 5 (Wall Street Journal Thursday, August 4, 2011; Wall Street Journal Online subscription required to access). On the subject of Catastrophe Claims, see generally John K. DiMugno, Steven Plitt and Dennis J. Wall, "CATClaims: Insurance Coverage for Natural and Man-Made Disasters" (West 2008; 2011 Supplements).
The same print newspaper report advises that Prudential Financial bucked the trend. Something called "U.S. insurance" leaped by nearly half, to $179,000,000.00 or $179 Million in what were apparently operating earnings in 2Q2011.
And the same print newspaper report has it that the huge Broker, Marsh & McLennan Company, reported its 2Q2011 profit increased 19%.
PMI, which issues -- or issued -- Mortgage Insurance Policies, has announced that its loss of approximately $3,000,000,000.00 or $3 Billion due to the Great Collapse since 2007, may have no choice but to stop issuing Mortgage Insurance Policies at all. See Erik Holm, "Mortgage Insurer PMI Warns of Shutdown; Shares Plummet" (Wall Street Journal Online Thursday, August 4, 2011)(subscription required to access).
And Lloyds -- Banking Group PLC, that is -- reported a Loss of $3,780,000,000.00 or $3.78 Billion which it attributes mostly to its sale of something called "faulty payment-protection insurance." Margot Patrick, "Lloyds Posts 2.3 Billion [Pound] Loss" (Wall Street Journal Online Thursday, August 4, 2011)(subscription required to access).
On recent financial and other fallout, see Credit Slips / A Discussion on Credit, Finance and Bankruptcy Blog. In particular, scroll down among the Comments to the post of August 2, 2011, by Bob Lawless, "Warren's Farewell Letter to CFPF Staff," to read Professor Elizabeth Warren's compelling Farewell.
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