Tuesday, March 15, 2005

AIG replaces CEO

AIG replaced Maurice "Hank" Greenberg as chief executive amid concern over a rising number of regulatory inquiries at the financial services titan he built over nearly four decades. Greenberg, 79, will continue as non-executive chairman. The company named Martin J. Sullivan, 50, its co-chief operating officer and vice chairman, as chief executive.

Actuaries do not predict age at death

Despite what you may have seen on Las Vegas last night (and on any other show that has ever depicted an actuary), actuaries do NOT have, use or create models that predict the age at which an individual will die. What (life insurance) actuaries do basically boils down to using the law of large numbers to determine how many people in a large group are going to die this year.

Wednesday, March 02, 2005

MMC Quarterly Loss

Yesterday, Marsh & McLennan reported a fourth-quarter loss of $676 million, or $1.28 a share, compared with a profit of $375 million, or 69 cents a year, a year earlier. Consolidated revenue for all of 2004 fell 1% to $3 billion. The world's biggest insurance broker said an ongoing restructuring of its business could result in the loss of another 2,500 jobs [in addition to the 3,000 already announced]. The stock's quarterly dividend was also cut, to 17 cents a share down from 34 cents, which would reduce the company's annual payout by $360 million a year. The company's stock fell $1 to $32 today.

Georgia Insurance Scam

A father-and-son team in Barnesville GA allegedly ran a taxicab insurance scam that left thousands of cabdrivers across Georgia without coverage because the vehicles were never insured. Law enforcement officials say the taxi scam, which allegedly ran for more than two years, netted Godfrey Waterhouse and his son, Robert Waterhouse, more than $3 million in premiums. Robert Waterhouse was arrested Tuesday and charged with 40 counts of theft by deception, 40 counts of insurance fraud and one count of racketeering. Godfrey Waterhouse, who was charged with the same 81 counts, is in New Zealand, and state officials are seeking extradition.

The two were licensed to sell insurance in Georgia; the state is in the process of revoking their licenses. The pair allegedly signed up livery companies for policies by saying they were representatives of the Mark Solofa Company, an insurer based in Pago Pago, American Samoa. But Solofa executives told officials they had never heard of the Waterhouses and that they sell policies only to vehicles in American Samoa. They just picked the company's name and were using it. They were just issuing policies and collecting money.