Category Archives: Insurance

AIG Was Broke

There’s a significant problem when you are a supremely big and connected financial institution: your failure will have an impact on the financial system as a whole.  Further, there is no one big enough to rescue you unless we drag out the public credit via the US Treasury, or its dedicated commercial paper financing facility, the […]

The Art of Extracting Large Commissions From Investors

The dirty truth is that some investments in this life are sold, and not bought.  The prime reason for this is that many people are not willing to learn enough to save and invest on their own.  Instead, they rely on others to corral them and say, “You ought to be saving and investing.  Hey, […]

Ranking P&C Reserving Conservatism

About 1 1/2 years ago, I wrote a seven-part series on investing in insurance stocks.  It is still a good series, and worthy of your time, because there aren’t *that* many writers freely available on the topic. This particular article deals expands on part 4 of that series, which deals with insurance reserving.  I wanted […]

The Shadows of the Bond Market’s Past, Part I

  Source: FRED Above is the chart, and here is the data for tonight’s piece: Date T1 T3 T5 T7 T10 T20 T30 AAA BAA Spd Note 3/1/71 3.69 4.50 5.00 5.42 5.70 5.94 6.01* 7.21 8.46 1.25 High 4/1/77 5.44 6.31 6.79 7.11 7.37 7.67 7.73 8.04 9.07 1.03 Med 12/1/91 4.38 5.39 6.19 […]

Understanding Insurance Float

Warren Buffett has made such an impression on value investors and insurance investors, that they think that float is magic.  Write insurance, gain float, invest cleverly against the float, and make tons of money. Now, the insurance industry in general has been a great place to invest, but we need to think about float differently.  Float is […]