In more good news for the life insurance and structured settlement industry, AIG, who has for years been the leader in the sale of structured settlement annuity contracts, today announced it had swung to a profit for the latest quarter of $1.82 billion after 7 consecutive quarters of losses. This announcement of solid profit and revenues for the beleaguered financial giant follows on the heals of similarly good news announced earlier this week by Allstate and Prudential Financial and provides the first solid quarter of strong financial results in over a year.
As anyone in the financial and settlement industry knows, pervasively negative headlines and news about life insurance company earnings, credit ratings and stability has an adverse impact on the ability to convince clients as to the safety of their money and savings. However, it is important to note that while over 70 banks have been declared insolvent and taken over by the FDIC so far this year, with each Friday afternoon typically bringing news of other take overs, not one life market has been declared insolvent this year despite unprecedented financial pressures and market conditions.
While I believe we are a long way from being out of the woods and that the life markets are going to continue to watch their spending and concentrate on core product lines, the return to strong profits is going to take a huge strain off management in that they won't have to go to capital markets to shore up financials to placate rating agencies.
Continue to tell the story about life insurance safety, solvency and a record of policyholder protection to plaintiffs as well as the tax free benefits of structured settlements. In the coming months and years of higher income tax rates the ability of injury victims to get locked in income, tax free income and financial integrity is going to be a great story to tell.