Survival of the fittest

Article Abstract:

The life insurance industry is slowly gaining economic stability, in spite of many weak links in the industry. Companies that have real estate investments in their portfolios have seen the most problems, as the 1990s financial slump hurt real estate prices. The threat of federal regulation has forced many companies to look at their fiscal health and helped the National Association of Insurance Commissioners produce better industry standards. Favorable ratings by Moody's Investors Service, Standard and Poor's Corp and Duff and Phelps Credit Rating Co are worth their high prices because they provide positive public relations for insurance companies that may otherwise be seen as faltering.

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Controlling our destiny

Article Abstract:

Life insurance companies need to focus on maintaining profits and increasing capital while holding down expenses. Companies can increase their profitability by attracting investment capital and managing it properly by not making risky investments. The American Council of Life Insurance recommends cutting overhead by 25%. Eliminating this much from their expense budgets will allow life insurance companies to retain a profit while still providing adequate service to their customers.

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Allocating capital resources

Article Abstract:

The insurance industry requires a better allocation of capital resources to allay questions about its financial health. An analysis of the life insurance carriers' balance sheets for 1990 demonstrates a need for greater strategic and financial management. Carriers need to examine the quality of their assets in order to increase public confidence. Reduced asset quality can also result in lowered ratings, which can reduce sales.

Analysis, Management, Capital investments, Surplus (Accounting)

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