The Week in a Minute: May 13

I will be at the CAS Spring Meeting in West Palm Beach, Sunday through Tuesday. Feel free to say hi.

The News

  • Massive floods on top of massive tornadoes, The Daily Mail has the U.S. catastrophe roundup.
  • The gov’t. gets set to start unloading its 92% stake in AIG, with 300M shares primed to hit the market, even though the stock has fallen by a third this year – seriously reducing the government’s take. The low price means the government will put up 200M less shares than originally thought. After the sale, it will still own 77% of AIG, according to the Washington Post. There is talk that the government will postpone the entire sale if the roadshow that began this week is not well-received.
  • Sony’s massive Playstation security breach could cost it $2B ($20 to get a new credit card for each of the 100 million customers hacked), and it has put insurers on notice for at least some of that.
  • Insurers seem less than thrilled with the RMS’ new hurricane model, which increases exposure inland – bad news for Texas and the Carolinas. I haven’t heard of any reinsurers shying away, though.
  • Should have seen this coming, given its growing cat exposure: Florida’s Citizens Property plans to borrow $900M and buy reinsurance for this cat season.
  • The New York Times is shocked! shocked! to find out that some states allow captives – even though it has one. The leading state for captives, Vermont, fires back. And a captive association shapes the article into a cone, then plops it on the NYT’s head:

It is disappointing and frustrating to try to respond to an article that clearly doesn’t understand the concept of captive insurance, completely misses the point that captive insurance is a highly regulated industry utilizing regulator approved conservative investments, and poses no danger to the unsuspecting public because it is, at its core, a self-insurance device.

Viral

Michael Bolton’s career highlight:

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