AIG to increase exposure to residential mortgages
Direct investment in residential mortgages is a key initiative of AIG it told its investors Friday.
The insurance group will buy home loans from banks and non-banks which will be securitized, using funds from the sale of mortgage insurer UGC which it agreed to sell for $3.4 billion.
The Financial Times reports that AIG has $4 billion in residential mortgages on its books, less than 1 per cent of its balance sheet, and believes that increasing exposure to the market will offset weaker yields in other investments.
With $400 million profit generated by UGC, AIG will expect to replace as much as it can from the mortgage market, which continues to grow fast and is approaching $2 trillion.
Health plan costs top concern for consumers, Trump not so much
Most consumers say that health insurance plans under Obamacare are too expensive but most intend to renew for 2017.
A survey by comparison site healthplans.com also revealed that concern over president-elect Trump’s potential curbing of the ACA prompted only 3 per cent to change their mind about buying a health insurance plan.
With 70 per cent of respondents saying plans are too expensive, 53 per cent said they will be shopping around with only 40 per cent saying they were happy with their plan; although as the poll was on a comparison site, a lower figure might have been expected.
Forty per cent said that they are less likely to buy a health insurance plan due to the reduced choice of carriers on the exchanges.
China shows strong surge in online insurance
As wealthier Chinese consumers increasingly want to protect their property and lives, there may not be a surge in insurance brokers and agents as online sales are rising fast.
The Insurance Association of China says that online sales of insurance policies more than doubled in 2015 with U$32.5 billion in premiums written, driven by life policies.
Shanghai Daily reports that the ten largest insurers in China collected 77.3 per cent of the total premiums.
However, the insurance association’s head Zhu Jinyuan said that despite a a sharp-rise in online sales being important to the industry in China “not enough efforts have been made to innovate online sales business models. Industry rules need to be improved and risk prevention needs to be strengthened.”
