As the economic crisis deepens, it has become clear that AIG's problems
extend across its massive life insurance and retirement services operations, which reported an $18-billion quarterly loss this month. InsuranceNewsNet.com writes:
So far, some of the biggest companies have suffered sharp drops in their stock prices, and many of them are asking for federal assistance. Industry conditions last year were the worst in memory and are expected to grow deeper this year amid credit rating downgrades, declining revenue and investment losses, according to credit rating firm A.M. Best Co. The worst-case scenario is that a second financial crisis is looming if these life insurance companies come under too much stress.
"It was essentially a house of cards at AIG," said Donn Vickrey, a forensic accountant and co-founder of Gradient Analytics in Scottsdale, Ariz. "I would characterize other life insurers as suffering varying degrees of risk."
