jump to last post 1-4 of 4 discussions (4 posts)

Which factors are likely to lead to the collapse of an insurance company?

  1. Anjili profile image81
    Anjiliposted 5 years ago

    Which factors are likely to lead to the collapse of an insurance company?

  2. ThoughtSandwiches profile image80
    ThoughtSandwichesposted 5 years ago

    To hear them complain...It would be because I had not paid my monthly premium.  That said...I don't see how I could be fully responsible.

  3. tamarawilhite profile image91
    tamarawilhiteposted 5 years ago

    Insurance companies have to maintain a certain amount of cash reserves intended to cover the average stream of claims and can hold the rest of their money in safe investments. We almost saw an insurance industry collapse when mortgage backed securities fell apart, because the securities were worthless once it was realized the owners only got income from mortgage securities as mortgages were paid but could not foreclose on property or own anything - and insurance companies held tons of those MBS.
    After major hurricanes and earthquakes, some insurers go bankrupt if they did not have enough financial reserves to pay insurance policy holders' claims and still stay in business.

  4. CJMcAllister profile image81
    CJMcAllisterposted 2 years ago

    Insurance companies are designed to protect you from a financial crisis. So what happens when the insurance company goes out of business? These points can help you prepare for just that situation. read more