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Annuity Watch

273 billion reasons why the insurance industry does not need a bailout

Barring some notable exceptions, the insurance industry remains financially healthy. No, that doesn't apply to every insurance company, but it does apply to the industry as a whole. Yes, the 2008 market tumble has taken it's toll on the industry as a whole. To the tune of a $51 billion loss. But the industry still has a $273 billion surplus.

Surplus!

That's the news from a recent report by Conning Research. It's odd to me that the report uses language like "...still struggling to shake off the impact of the financial crisis..." and "...capital losses will continue to challenge the industry...". Challenge? Shake off? They have a $273 billion surplus of assets! OK, let's assume that some of those "assets" are more toxic than others. That could be influencing the language.

But the report goes on to report a much rosier future for the industry -- and therefore annuity investors as well. Here's how Stephan Christiansen, director of research at Conning, puts it:

We project that surplus plus AVR will increase 23 percent to $337 billion by 2011 as the industry adapts to the new environment and due in part to additional capital paid in to the industry. Additionally, we forecast premium growth through 2011 based in part on demand stimulated by estate planning, a focus on savings and more conservative protection needs, and by a need for more stable investment alternatives.

In short: the insurance industry has an extremely stable financial footing. Of course, things might not be so great for your carrier. And many carriers are in fact, in trouble. Protect yourself. Get a free heath-check of any insurance company right now. If you own an annuity or are thinking of purchasing an annuity, you must know the health of the company to make sure you have the safety and guarantee your investment can and should provide.

Then call us. We're happy to help.