Overview of Reciprocal Insurance Exchanges and Recent Market Trends
Reciprocal Insurance Exchanges (RIE; also referred to interinsurance exchanges) have long been a part of the property & casualty (P&C) insurance industry, with roots dating back to the late nineteenth century. Many of the largest RIEs today began operations in the early decades of the last century, with the top five largest RIEs by direct written premiums founded prior to 1930.
Privately-Owned Insurers in the U.S. Life Insurance Industry
In the wake of the 2008/2009 global financial crisis, the U.S. life insurance industry underwent a spate of business sales/exits, spin-offs, and product changes in the 2010s which has continued through the 2020s. ALIRT has discussed many of the trends and factors that have contributed to this transition, and one of the most impactful developments has been the increased number of life insurance companies owned by asset managers, private investment funds, and other private investor groups. While privately-owned organizations have long been involved in the life industry (and the entire insurance industry for that matter), they have become increasingly active in acquiring life insurers in the years subsequent to the financial crisis. Some reasons for this trend include:
Cracks Starting to Show? Fallout From Collateral Issues with Vesttoo
It’s tough times for the U.S. property & casualty (P&C) Industry. Tough times for insureds who confront ever higher rates in most lines of business, for (re)insurers which are struggling to right-size pricing in the teeth of inflation and a volatile loss environment, and for regulators who, in personal lines especially, are caught between the conflicting demands of the first two. In addition, wholesale distributors vie for diminished capacity while retail producers lament market exits and spiking rates. Investors, for their part, wonder when the market will regain some sort of consistent footing.
BBB-rated Bond Exposure for Life Insurers
Life insurers significantly increased their holdings of NAIC Class 2 bonds (bonds with BBB/Baa ratings public rating agencies) in the years since the financial crisis of 2008-2009.
Prudential Agrees to Reinsure block of Guaranteed Universal Life Insurance with Somerset Re
Prudential Financial, Inc. (PRU) announced this week that it had entered into a reinsurance agreement to cede a $12.5 billion block of guaranteed universal life insurance business (GUL) to Bermuda based Somerset Reinsurance Ltd. (Somerset Re). This is the second substantial reinsurance arrangement announced by PRU over the last few months.
ALIRT Update: Residual Market Trends in Higher Risk States
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Mortality for the Life Insurance Industry in 2022
In this review we highlight the increase in mortality and its continued impact on the U.S. life insurance industry.
MetLife and Prudential Cede Legacy Blocks
In the past week both MetLife, Inc. (MetLife) and Prudential Financial, Inc. (Prudential) announced reinsurance transactions pertaining to existing products and business lines. Details regarding each transaction are highlighted below:
No Surprise – Hallmark Insurer Subsidiaries Downgraded
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No Surprise – Hallmark Insurer Subsidiaries Downgraded
As if on cue, last Friday (May 5th) A.M. Best downgraded the Hallmark Financial subsidiaries below the critical “A-” level to “B++” (5th highest), citing a “significant decline in Hallmark’s balance sheet strength and operating performance due to continued adverse development in the group’s retained discontinued commercial auto lines.”