Add another constituency to Gulf Coast residents and convention-attending Republicans to those worried by Hurricane Gustav’s approach: Insurance companies already battered by the ongoing financial crisis.
The Wall Street Journal reports:
Gustav’s timing couldn’t be worse for an industry whose investment portfolios — into which insurers sink premiums, and then liquidate to pay claims — have sprung leaks.
In the most notable example, American International Group Inc. reported a loss of $12.2 billion in the first six months of the year, mostly from failing subprime-mortgage-related investments. The remaining property-and-casualty insurers reported a combined $5.4 billion in investment losses during the same period, according to a report from Fitch Ratings.
