FORECASTS? – A recent market forecast by IDC, a global research firm, for online sales of personal P&C insurance predicts that the "Internet will influence 37% of all premiums purchased in 2004." As with many of the forecasts we read, we don't see how such specific predictions can possibly be made. For what it's worth, we predict the Internet will "influence" 100% of P&C sales by then.

NYSE DECIMALIZATION – The Big Board has quoted stock prices in fractions since it was founded in 1792, but the government-mandated plan to bring the world's largest stock market in line with markets around the globe has begun. The stock of Gateway, FedEx and five other NYSE companies is now being offered in dollars and cents. The move to decimals is said to give investors better prices for their shares by narrowing trading spreads. Completion of the transition will now depend on how fast Wall Street firms can convert their computer systems.

SNOOPY DELIVERS – MetLife, Inc.'s stock has appreciated nearly 70% since its opening IPO price of $14.25 per share. However, some observers believe it has reached a plateau at about 12 times earnings per share and at 1.25 times book value. Why that formula doesn't apply to the "dot.coms" is unclear.

OVERSIGHT – According to the Consumer Federation of America, "about three-quarters of Americans live in states whose insurance departments don't meet minimum standards of funding to oversee the insurance industry."

SHAKE UP – Prudential, apparently disappointed with sales results (premium income dropped about 15% in 1999 compared to 1998), is undertaking a reorganization of its field offices that is leading to the reassignment of some 80 of its 150 field managers, with some "reassignments" expected to lead to separation from the company.

ALL-TIME LOW – The U.S. personal savings rate reached an all-time low in July.  American consumers went on a buying binge, increasing their spending by 0.6 percent, while incomes grew by only 0.3 percent.  The end result was that savings as a percentage of after-tax income (the personal savings rate) was a negative 0.2 percent in July, the lowest monthly rate ever.
 

2nd Q VA SALES – According to National Underwriter, 2nd quarter VA sales hit $36.1 billion, down slightly from $36.4 billion in the 1st quarter of the year.

BANK OF AMERICA PLANS – The No. 2 U.S. bank holding company will overhaul its 4,500 branch offices in hopes of eventually selling more stocks, bonds and financial services to banking customers. The big change will be "financial centers"...branch offices focused on providing customers with investment services, advice, access to the company's retail brokerage unit and research. In July, Bank of America said it would cut 10,000 jobs as part of a restructuring plan. The layoffs will principally focus on middle and senior management.

UNUMPROVIDENT – The number one U.S. disability insurer, struggling with a weakening balance sheet due to mounting claims reserves and lower earnings, will sell its now inactive life insurance operation (Provident National) and reinsure some of its business in order to strengthen the balance sheet and concentrate on its core disability insurance business. Allstate will buy the life company, reinsuring the inforce life insurance with Swiss Re and a portion of the group long-term disability with Max Re.

GENAMERICA SETTLES – The former General American and current MetLife subsidiary will pay $55 million in benefits to life insurance customers who claimed they were misled about policy performance when they bought life insurance policies. The settlements involve 250,000 life insurance customers who bought policies between 1982 and 1996. GenAmerica contended it cut its dividend rate when interest rates fell, said that dividend payouts were never guaranteed, denied the charges of misleading policyholders over policy performance, but settled as a "business decision."

OPERATING PROFITS DROP – According to Weiss Ratings, the nation's life and health insurers experienced a $203 million, or 1.6 percent, decline in operating profits during the first quarter of 2000 versus the first quarter of last year. The reduction is blamed in part on increases in surrenders and life insurance claims. However, with capital gains increasing $164.8 million, when coupled with other gains, the industry closed the quarter with an overall net profit up 0.6 percent.

LEGAL LOTTERY – The latest legal "get rich scheme" may be brewing in the California Senate, where a bill has been offered to allow lawyers to reopen 600,000 claims paid to Northridge earthquake victims.  The real intent seems obvious, when the Personal Insurance Federation of California (PIFC - an industry association representing insurers that sell nearly 50% of earthquake insurance) reports it received 208,446 claims and just 13 complaints. Will it never end!