Insurance Agent Forum

[jim hebert]

I have a fixed annuity with American General, (AIG), and with all the sub-prime problems they've had, I was wondering if they were safe? Any suggestions or advise on how to verify there standings? I've checked with them and they say all is well, but I wouldn't expect them to say that all is not well even if the doors shut down.

[JMO Fan]

Check the rating agencies -- AM Best, Moody's, Duff & Phelps, Fitch.

It can be hard to get other opinions, especially because it is generally illegal to say something negative about a company that might cause it to lose financial stability.

[BrokersAllianceAnnuities]

AIG's current rating of A+ is not bad I have no problem selling AIG annuities, if it is determined to be suitable for the particular client.

[SportsNut]

Originally Posted by jim hebert

I have a fixed annuity with American General, (AIG), and with all the sub-prime problems they've had, I was wondering if they were safe? Any suggestions or advise on how to verify there standings? I've checked with them and they say all is well, but I wouldn't expect them to say that all is not well even if the doors shut down.

If you look at AIG's stock price it has surely been tattoo'd in the past 12 months falling from a high of 70, to 26 as of today. Certainly a broader swing thna the avg of the mkt or similar stocks in the past 12 months.

I would NOT surrender the annuity but would keep them on the watch list. You may want to set a yahoo (or other) financial page to watch the symbol AIG and email you news about the company... not that you want to paranoid about it, but you will want to be informed, just in case any bad news breaks...

[COLOR=#ffffff]Insurer financial strength ratings as of 06/17/2008:[/COLOR]

• American General Life Insurance Company
• American General Life and Accident Insurance Company
• The United States Life Insurance Company in the City of New York
• AIG Life Insurance Company
• American International Life Assurance Company of New York

AgencyBasis Rating*</B>A.M. Best Company Financial Strength A+ Superior1FitchRatingsFinancial Strength AA+ Very Strong1Moody's Investors ServiceFinancial Strength Aa2 Excellent2 Standard & Poor's
Financial Strength
AA+ Very Strong1

• American General Assurance Company

AgencyBasis Rating*A.M. Best Company
Financial Strength
A+ Superior1


Want more control over the chart? [COLOR=#0066cc]Try our Interactive Chart[/COLOR].

Splits:18-Nov-86 [2:1], 23-Jul-90 [5:4], 30-Jul-93 [3:2], 31-Jul-95 [3:2], 28-Jul-97 [3:2], 03-Aug-98 [3:2], 02-Aug-99 [5:4], 31-Jul-00 [3:2]Last Trade:26.53Trade Time:4:01PM ETChange: 1.46 (5.82%)Prev Close:25.07Open:26.36Bid:N/AAsk:N/A1y Target Est:46.21Day's Range:26.36 - 28.1952wk Range:19.73 - 70.13Volume:49,426,514Avg Vol (3m):34,564,200Market Cap:66.11BP/E (ttm):N/AEPS (ttm):-2.24Div & Yield:0.88 (3.50%)

[Winter]

As a side comment, annuities are an insurance/fixed product and, in most states the carrier must have secondary re-insurance and/or the product is covered by the state re-insurance pool, up to a certain amount which varies by state.

Winter

[padthaiforlunch]

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Wow, what a meltdown. And it's probably not done. I won't sell AIG until they get through this. This mortgage sheep pile is still in the beginning stages. It's estimated to take down 150 banks before it's over. AIG is the insurance leader in owning worthless sheep. I wouldn't be surprised if AIG join their ranks.

But they will probably be acquired if life gets too bad for them.

If you surrender charge isn't too high and you are truely worried, then go ahead and switch. Who wants to deal with a state guarantee fund which might reimburse your premium?

The problem with the rating companies is they have proven themselves to inflate reality. Just look at how highly they underservedly rated some of the cbo tranches.

[sman]

Originally Posted by padthaiforlunch

Wow, what a meltdown. And it's probably not done. I won't sell AIG until they get through this. This mortgage sheep pile is still in the beginning stages. It's estimated to take down 150 banks before it's over. AIG is the insurance leader in owning worthless sheep. I wouldn't be surprised if AIG join their ranks.

But they will probably be acquired if life gets too bad for them.

If you surrender charge isn't too high and you are truely worried, then go ahead and switch. Who wants to deal with a state guarantee fund which might reimburse your premium?

The problem with the rating companies is they have proven themselves to inflate reality. Just look at how highly they underservedly rated some of the cbo tranches.

So you wouldn't be surprised if AIG joined the ranks of the banks that are going under? Is this based on a "hunch" or do you have some evidence to back up such a statement? In March of 2008 they had over $1 trillion in assets. They are very diversified. They aren't just a financial services company. They do life insurance, annuities, property and casualty insurance, re-insurance, finance company, etc. And they are worldwide. In addition, their stock is up about 50% in a little over a week. Not the kind of movement you get from a company that is about to go under.

[padthaiforlunch]

Pwned! By the Feds. This is a real sh*t pile. Alt-A mess is still on the horizon.

Originally Posted by sman

So you wouldn't be surprised if AIG joined the ranks of the banks that are going under? Is this based on a "hunch" or do you have some evidence to back up such a statement? In March of 2008 they had over $1 trillion in assets. They are very diversified. They aren't just a financial services company. They do life insurance, annuities, property and casualty insurance, re-insurance, finance company, etc. And they are worldwide. In addition, their stock is up about 50% in a little over a week. Not the kind of movement you get from a company that is about to go under.

[sman]

Originally Posted by padthaiforlunch

Pwned! By the Feds. This is a real sh*t pile. Alt-A mess is still on the horizon.

I have to say I never saw this coming. A company with a trillion dollars in assets being taken down over $85 billion dollars. They've had over $100 billion in revenues in each of the last 3 years. This is not an insolvent company. I think this is a prime case of where the parts are worth more than the whole and they should sell off (or spin off) the parts. Piss poor management for sure. Can't imagine there not being investor lawsuits coming.

[The Rabbi]

I no longer believe in corp America or the gov't or religion. I'm not so sure I even believe in myself anymore. I'm not sure that what I see happening is real or Memorex.

America is evenly split in our ideals and all we do is fight with each other over money and religion and who is right and who is wrong. Who's to say?

I say "No one knows what the hell they are talking about". The hypocracy is overwhelming. I can see it on this forum.

[Mr. Bill]

Originally Posted by sman

I have to say I never saw this coming. A company with a trillion dollars in assets being taken down over $85 billion dollars. They've had over $100 billion in revenues in each of the last 3 years. This is not an insolvent company. I think this is a prime case of where the parts are worth more than the whole and they should sell off (or spin off) the parts. Piss poor management for sure. Can't imagine there not being investor lawsuits coming.

I think "investor lawsuits" are beyond the capability of Pre-Paid Legal.

[Franz Kafka]

Originally Posted by sman

I have to say I never saw this coming. A company with a trillion dollars in assets being taken down over $85 billion dollars. They've had over $100 billion in revenues in each of the last 3 years. This is not an insolvent company. I think this is a prime case of where the parts are worth more than the whole and they should sell off (or spin off) the parts. Piss poor management for sure. Can't imagine there not being investor lawsuits coming.

If I remember my series 6 study correctly

Assets = liabilities + net worth

Huge assets may mean huge liabilities.