Nationwide Insurance=Lehman Brothers

[MIGA1626]

The massive amount non-renewals speak for itself. Who is to say they aren't setting on billions of losses with billions in leverage. Would a company with this much financial resources really have to non-renew this many accounts? This is way more than just a actuarial adjustment. This is a systemic failure. Be prepared.

 

[NY independent]

Can't the same be said for others? The mutuals (State Farm) don't disclose publicly but once per year but we can make assumptions, and we all know how Allstate is doing. These are major US corporations which together represent tremendous market share. This is deeper than a hard market and it's troubling. Nobody is paying attention.

 

[Tahoe Ray]

The massive amount non-renewals speak for itself. Who is to say they aren't setting on billions of losses with billions in leverage. Would a company with this much financial resources really have to non-renew this many accounts? This is way more than just a actuarial adjustment. This is a systemic failure. Be prepared.

Nationwide does a lot more than P&C and they don't have a business model that's even similar to Lehman.

Not sure how you can equate the two.

 

[marindependent]

Not sure how you can equate the two.

I agree with you.

Would a company with this much financial resources really have to non-renew this many accounts?

They may in California.

I do think that the Insurers are in for a major financial headache...
"The bond-market sell-off that's sending yields soaring is starting to eclipse some of the most extreme market meltdowns of past eras....Those losses are nearly in line with stock-market losses seen during the worst crashes of recent history — when equities slumped 49% after the dot-com bubble burst and 57% in the aftermath of 2008."

However my understanding if the insurers intend to keep and hold these bonds, they may not have to reflect the losses on their balance sheets. Nonetheless it must suck having to hold on a 2% bond right now.

But that is not specific to nationwide, rather the entire industry.

 

[Markthebroker]

The massive amount non-renewals speak for itself. Who is to say they aren't setting on billions of losses with billions in leverage. Would a company with this much financial resources really have to non-renew this many accounts? This is way more than just a actuarial adjustment. This is a systemic failure. Be prepared.

 

[MIGA1626]

Can't the same be said for others? The mutuals (State Farm) don't disclose publicly but once per year but we can make assumptions, and we all know how Allstate is doing. These are major US corporations which together represent tremendous market share. This is deeper than a hard market and it's troubling. Nobody is paying attention.

Yes. I am currently mad at Nationwide at the moment but the same could be said for all of them. I really really want to know what the financials look like in this moment. What are the true liabilities outstanding? Who knows....

 

[MIGA1626]

Nationwide does a lot more than P&C and they don't have a business model that's even similar to Lehman.

Not sure how you can equate the two.

I can tell by the way they are acting. They are literally panicking. We don't know exactly how they are financing their business. Who knows how much leverage is actually involved or what contracts are in place.

 

[MIGA1626]

ose losses are nearly in line with stock-market losses seen

I agree with you.

They may in California.

I do think that the Insurers are in for a major financial headache...
"The bond-market sell-off that's sending yields soaring is starting to eclipse some of the most extreme market meltdowns of past eras....Those losses are nearly in line with stock-market losses seen during the worst crashes of recent history — when equities slumped 49% after the dot-com bubble burst and 57% in the aftermath of 2008."

However my understanding if the insurers intend to keep and hold these bonds, they may not have to reflect the losses on their balance sheets. Nonetheless it must suck having to hold on a 2% bond right now.

But that is not specific to nationwide, rather the entire industry.

And I think if there is a significant amount of leverage along with decreasing bond values, paired with them having to sell assets to fund liabilities... its is those 3 things together.

 

[thomasm]

A massive amount of non-renewals (along with rate increases and layoffs) is what brought Geico back from the brink in the 70's.

 

[MIGA1626]

A massive amount of non-renewals (along with rate increases and layoffs) is what brought Geico back from the brink in the 70's.

Good point. I guess it's a matter of how quick you can throw those policies into the trash before your CR blows up to 175%