XXX OVERSTATED – According to Conning & Company, Regulation XXX, which increased reserve requirements of term life products, did not result in the dramatically increased premiums or significantly reduced sales that many in the insurance industry had feared. However, the real effect may be additional expenses on insurers who are already facing profitability challenges. "Many term life insurers need to further reduce expenses with the potential of everything except agent-related expenses and technology investments getting squeezed out in the cost-cutting process."  The complete study, "Term Life and Regulation XXX: A Straw in Search of a Camel's Back," can be purchased at http://www.conning.com.

AIG APPETITE – AIG, widely considered the world's largest insurer, is on the lookout for acquisitions both in the United States and overseas.  Chairman Hank Greenberg's last big-ticket buy was SunAmerica, which AIG bought for about $18 billion three years ago.  Greenberg is now 75, has made no mention of retiring and his heir-apparent son, Evan, left the firm unexpectedly last September.  Hank Greenberg has been CEO since 1967 and is only the second chairman the company has had since the founding of the American Insurance Group in 1919 in Shanghai!

ALSO HUNGRY – David D'Alessandro, John Hancock chief executive, told investors and analysts that the insurer wants to buy a life insurance company about a third the size of John Hancock.  The ideal company "would have strong investment management and general account units, through which John Hancock could grow its guaranteed investment contract business."

POSSIBLE MEAL? – Liberty Mutual is trying to take advantage of a hot market and sell its investment manager, Liberty Financial. Those sniffing include AIG, Prudential Corp Plc, and American General. Cost will be about $2 billion.

UP FOR RENEWAL – The bulk of the Insurance Marketplace Standards Association's (IMSA) 244 members are up for renewal this month and, according to National Underwriter, "the renewals come at a time when IMSA's role in the insurance industry is being debated."  The complete National Underwriter article can be found here.  

SAVING MONEY – Last year's top selling mutual fund company, Janus, will cut 468 jobs as phone and mail activities have decreased due to customers using the Internet.  Despite a tough performance year, Janus says the move was not a cost cutting one, but rather a move "realizing technological efficiencies."  On the other hand, Schwab needed a plan to offset depressed profits and asked thousands of its employees to take three days off during the next month.  The plan was later scrapped due to legal problems.

METLIFE'S NEW BANK – The Federal Reserve Board has approved MetLife's acquisition of Grand Bank of New Jersey. Grand Bank, which will be renamed MetLife Bank, is the first bank purchase by an insurance company since the passage of the Gramm-Leach-Bliley Act, which paved the way for banks, insurance companies, investment banks, and other financial institutions to operate as affiliate companies under the financial holding company umbrella.

PARADOX – A new Harris Interactive study shows a sharp increase in public hostility toward the health insurance and managed care industries, which is not, however, based on the personal experiences of health plan members, most of whom seem to think well of their own health plans.  It's believed that "these deteriorating public perceptions of managed care are due to fears that are media-driven or physician-driven, and not experience-driven."  Complete study results are available in PDF format here (click Issue 6).

WEB BANKS – While Internet-only banks are gaining some popularity with higher interest rates and lower fees as driving forces, they may not make it big since most people apparently still want the option to visit a branch.  With small work forces and no need for branches, the Web banks are less expensive to operate than their "brick and mortar" brethren.  However, few have shown a profit...major reasons are high marketing costs and slow growth in customer accounts. Online banking is expected to triple in the next five years, but it looks like the traditional banks will be getting the "lion's share."

INSWEB REPORT – For fiscal year 2000, InsWeb reported total revenues of $23.2 million and a net loss of $50.8 million. This compares to revenues of $21.8 million and a net loss of $36.2 million for fiscal year 1999.  However, the fourth quarter loss of  $.19 per share was substantially better than "First Call consensus net loss estimates" of $.26 and the $.32 loss in the fourth quarter of 1999.
 
SETTLEMENT COMPANY CLOSES – LifeTime Capital, a Florida insurance settlement company, has closed its doors.  Considered by many as a "white hat" in the troubled industry, LifeTime cited "bad business climate, bad press and onerous state regulations" as reasons for the closing. To their credit, management ensured that investor dollars were secure in a major bank trust account.  President Reginald O. Parker put most of the blame on the media. "Over the last two years, there has been an onslaught of media stories that have unfairly lumped legitimate life settlement companies together with unscrupulous scam artists who seek to dupe unsuspecting investors."