Posted by Yi Xin Jin (Lily)
Needham, Mass. — Has the financial crisis in the United States has claimed yet another victim? According to a new report, "Guilt by Association or Real Trouble? Outlook for US Life Insurer's Profitability and Spending" from TowerGroup, U.S. life insurers—among the largest institutional shareholders in the world—have written off major investments in struggling financial firms. As a result, the life insurance industry is facing a number of challenges to profitability in the wake of the financial crisis, and needs to look to initiatives that will prevail though 2009 as the industry recovers.
The report's author, Rachel Alt-Simmons, research director, insurance for the Needham, Mass.-based firm, says that, in general, the highly capitalized life insurance industry in the United States has largely been thought to be immune to the credit crisis. But like many other financial institutions, the interconnectedness of banks, asset managers, brokerage firms and other insurers is proving to have a much greater impact than previously anticipated.
Click to read more