“My profession has left me shamefully undereducated on financial planning and investment issues.”
A consumer panel at TD Ameritrade’s 2013 Fiduciary Leadership Summit in Palm Beach, Fla., on Thursday featured three unique—and at times emotional—situations that required top-notch financial advice. Did they receive it? Yes and no, according to the panelists.
The panel, convened to discuss consumer awareness of the concept of fiduciary and moderated by Barbara Roper of the Consumer Federation of America, quickly deviated into other issues, as panelists agreed that acting in their best interest was important even if they never heard the term fiduciary used in that context.
The panelist referred to as Jeff, responsible for the quote above, noted his background in insurance while at Aetna in the early 1970s. He took the Series 7 exam and was for a time a registered rep, but the recession of 1973 stopped his career before it started. Preferring more of an entrepreneurial bent, he and his wife started a business that was eventually sold to Berkshire Hathaway, “so for a time I worked for Warren Buffett,” he quipped.
Hot Insurance Stocks To Watch Right Now: AmTrust Financial Services Inc (AFSI)
Amtrust Financial Services, Inc., incorporated on November 7, 1990, is a holding company. The Company is a multinational specialty property and casualty insurer focused on generating consistent underwriting profits. The Company operates in four business segments: small commercial business, specialty program and personal lines reinsurance. The Company transacts business through 11 insurance company subsidiaries: Technology Insurance Company, Inc. (TIC), Rochdale Insurance Company (RIC), Wesco Insurance Company (WIC), Associated Industries Insurance Company, Inc. (AIIC), Milwaukee Casualty Insurance Company (MCIC), Security National Insurance Company (SNIC), AmTrust Insurance Company of Kansas, Inc. (AICK) and AmTrust Lloyd�� Insurance Company of Texas (ALIC). In January 2013, the Company acquired First Nonprofit Companies, Inc. In February 2013, the Company's subsidiary acquired Car Care Plan (Holdings) Limited (CCPH) from Ally Insurance Holdings, Inc.
Small Commercial Business
Small Commercial Business segment provides workers��compensation to small businesses that operate in low and medium hazard classes, such as restaurants, retail stores, physicians and other professional offices, and commercial package and other property and casualty insurance products to small businesses. The Company is authorized to write its Small Commercial Business products in all 50 states. The Company distributes its policies through a network of over 8,100 select retail and wholesale agents who are paid commissions based on the annual policy premiums written. Commercial package products provide a range of insurance to small businesses, including commercial property, general liability, inland marine, automobile, workers��compensation, and umbrella coverage.
The Company maintains Small Commercial Business property and casualty claims operations in several of its domestic offices and the commercial package claims operation is separated into four processing units: casualty, propert! y, cost-containment/recovery and a fast-track physical damage unit. As of December 31, 2012, its Small Commercial Business property and casualty claims were approximately 61% automobile and 13% property and inland marine with the remaining 26% involving general liability and umbrella losses.
Specialty Risk and Extended Warranty
The Company��Specialty Risk and Extended Warranty segment provides coverage for consumer and commercial goods and custom designed coverages, such as accidental damage plans and payment protection plans offered in connection with the sale of consumer and commercial goods in the United States and Europe, and certain niche property, casualty and specialty liability risks in the United States and Europe, including general liability, employers��liability and professional and medical liability. specialty risk business primarily covers, such as legal expenses in the event of unsuccessful litigation; property damage for residential properties; home emergency repairs caused by incidents affecting systems, such as plumbing, wiring or central heating; latent defects that materialize on real property after building or completion; payment protection to insureds if they become unable to meet financial obligations under finance contracts; guaranteed asset protection (GAP) to cover the difference between an insurer�� settlement and the asset value in the event of a total loss, and general liability, employers��liability, public liability, negligence of advisors and liability of health care providers and medical facilities.
The Company's extended warranty business covers selected consumer and commercial goods and other risks, including personal computers; consumer electronics, such as televisions and home theater components; consumer appliances, such as refrigerators and washing machines; automobiles (excluding liability coverage); furniture, and heavy equipment. The Company also serve as a third party administrator to provide claims handling and ca! ll center! services to the consumer products and automotive industries in the United States and Canada. It underwrites the specialty risk coverage on a coverage plan-level basis, which involves substantial data collection and actuarial analysis, as well as analysis of applicable laws governing policy coverage language and exclusions.
Specialty Program
The Company�� Specialty Program segment provides workers��compensation, package products, general liability, commercial auto liability, excess and surplus lines programs and other specialty commercial property and casualty insurance to a narrowly defined, homogeneous group of small and middle market companies. The type of risk covered by this segment is similar to the type of risk in Small Commercial Business but also covers, to a small extent, certain higher risk businesses. The coverage is offered through accounts with various agents to multiple insureds. Policyholders in this segment primarily include industries, such as retail, wholesale, service operations, artisan contracting, trucking, light and medium manufacturing, habitational and professional employer organizations. As of December 31, 2012, the Company underwrote 77 programs through 44 independent wholesale and managing general agents. Workers��compensation insurance consists approximately 33% of this business during the year ended December 31, 2012.
Personal Lines Reinsurance
The Company�� Personal Lines Reinsurance Segment has a 20% participation in the Personal Lines Quota Share, by which it receive 10% of the net premiums of the personal lines business. The Personal Lines Quota Share provides that the reinsurers, severally, in accordance with their participation percentages, will receive 50% of the net premium of the GMACI Insurers and assume 50% of the related net losses.
Hot Insurance Stocks To Watch Right Now: Fairfax Financial Holdings Ltd (FRFHF)
Fairfax Financial Holdings Limited (Fairfax) is a financial services holding company. The Company, through its subsidiaries, is principally engaged in property and casualty insurance and reinsurance and the associated investment management. The Company�� segments consist of Insurance, Reinsurance, Insurance and Reinsurance Other, Runoff, and Corporate and Other. On December 22, 2011, the Company completed the acquisition of 75% interests in Sporting Life Inc. On August 16, 2011, the Company acquired William Ashley China Corporation. On March 24, 2011, an indirect wholly owned subsidiary of Fairfax completed the acquisition of The Pacific Insurance Berhad. On February 9, 2011, an indirect wholly owned subsidiary of Fairfax completed the acquisition of First Mercury Financial Corporation. In October 2012, its RiverStone runoff subsidiary acquired all the outstanding shares of Brit Insurance Limited. Advisors' Opinion:- [By Dan Caplinger]
That business model has been so successful that other, smaller insurance companies have emulated it. For instance, Fairfax Financial (NASDAQOTH: FRFHF ) and Markel (NYSE: MKL ) have used the same investing model to take advantage of their respective core insurance businesses. Both Fairfax and Markel have had substantial success, showing the power of using temporarily available premium reserves to make higher-return investments.
- [By Tim Brugger]
Citing the letter of intent to be acquired�for $9 a share signed Monday with a consortium led by its largest shareholder, Fairfax Financial (NASDAQOTH: FRFHF ) , BlackBerry� (NASDAQ: BBRY ) �has opted to cancel its conference call and webcast following the 7 .a.m EST release of Q2 earnings this Friday, the company announced yesterday.
Top 5 Gold Companies To Watch In Right Now: Citizens Inc (CIA)
Citizens, Inc. (Citizens), incorporated on November 8, 1977, is an insurance holding company serving the life insurance needs of individuals in the United States. The Company operates in three segments: Life Insurance, Home Service and Other Non-insurance Enterprises. Its core insurance operations include issuing and servicing the United States Dollar-denominated ordinary whole life insurance and endowment policies predominantly to high net worth, high income foreign residents, principally in Latin America and the Pacific Rim, through independent marketing consultants; ordinary whole life insurance policies to middle income households concentrated in the midwest and southern United States through independent marketing consultants, and final expense and limited liability property policies to middle and lower income households in Louisiana, Arkansas, and Mississippi through employee and independent agents in its home service distribution channel.
Life Insurance
The Company�� Life Insurance segment issues ordinary whole life insurance domestically and in United States Dollar-denominated amounts to foreign residents. These contracts are designed to provide a fixed amount of insurance coverage over the life of the insured. Additionally, endowment contracts are issued by the Company, which are principally accumulation contracts that incorporate an element of life insurance protection. The Company operates the segment through its subsidiaries: CICA Life Insurance Company of America (CICA) and Citizens National Life Insurance Company (CNLIC).
The Company offers several ordinary whole life insurance and endowment products designed to meet the needs of its non-United States policy owners. Its domestic life insurance products focus primarily on living needs and provide benefits focused toward accumulating money for the policyowner. The Company�� life insurance products are principally designed to address the insured�� concern about outliving his or her monthly income,! while at the same time providing death benefits. The primary purpose of its product portfolio is to help the insured create capital for needs, such as retirement income, children's higher education funds, business opportunities, emergencies and health care needs.
Home Service Insurance
The Company operates in the Home Service market through its subsidiaries Security Plan Life Insurance Company (SPLIC) and Security Plan Fire Insurance Company (SPFIC), and focus on the life insurance needs of the middle and lower income markets, primarily in Louisiana, Mississippi and Arkansas. Its home service insurance products consist primarily of small face amount ordinary whole life and pre-need policies, which are designed to fund final expenses for the insured, primarily consisting of funeral and burial costs.
Other Non-Insurance Enterprises
Other Non-insurance Enterprises includes Computing Technology, Inc., which provides data processing services to the Company, and Insurance Investors, Inc., which provides aviation transportation to the Company. This segment also includes the results of Citizens, Inc., the parent Company.
Hot Insurance Stocks To Watch Right Now: AmTrust Financial Services Inc (AFSI.O)
Amtrust Financial Services, Inc., incorporated on November 7, 1990, is a holding company. The Company is a multinational specialty property and casualty insurer focused on generating consistent underwriting profits. The Company operates in four business segments: small commercial business, specialty program and personal lines reinsurance. The Company transacts business through 11 insurance company subsidiaries: Technology Insurance Company, Inc. (TIC), Rochdale Insurance Company (RIC), Wesco Insurance Company (WIC), Associated Industries Insurance Company, Inc. (AIIC), Milwaukee Casualty Insurance Company (MCIC), Security National Insurance Company (SNIC), AmTrust Insurance Company of Kansas, Inc. (AICK) and AmTrust Lloyd�� Insurance Company of Texas (ALIC). In January 2013, the Company acquired First Nonprofit Companies, Inc. In February 2013, the Company's subsidiary acquired Car Care Plan (Holdings) Limited (CCPH) from Ally Insurance Holdings, Inc.
Sma ll Commercial Business
Small Commercial Business segment provides workers��compensation to small businesses that operate in low and medium hazard classes, such as restaurants, retail stores, physicians and other professional offices, and commercial package and other property and casualty insurance products to small businesses. The Company is authorized to write its Small Commercial Business products in all 50 states. The Company distributes its policies through a network of over 8,100 select retail and wholesale agents who are paid commissions based on the annual policy premiums written. Commercial package products provide a range of insurance to small businesses, including commercial property, general liability, inland marine, automobile, workers��compensation, and umbrella coverage.
The Company maintains Small Commercial Business property and casualty claims operations in several of its domestic offices and the commercial package claims opera tion is separated into four processing units: casualty, pr! op! erty, cost-containment/recovery and a fast-track physical damage unit. As of December 31, 2012, its Small Commercial Business property and casualty claims were approximately 61% automobile and 13% property and inland marine with the remaining 26% involving general liability and umbrella losses.
Specialty Risk and Extended Warranty
The Company��Specialty Risk and Extended Warranty segment provides coverage for consumer and commercial goods and custom designed coverages, such as accidental damage plans and payment protection plans offered in connection with the sale of consumer and commercial goods in the United States and Europe, and certain niche property, casualty and specialty liability risks in the United States and Europe, including general liability, employers��liability and professional and medical liability. specialty risk business primarily covers, such as legal expenses in the event of unsuccessful litigation; property damage for resid ential properties; home emergency repairs caused by incidents affecting systems, such as plumbing, wiring or central heating; latent defects that materialize on real property after building or completion; payment protection to insureds if they become unable to meet financial obligations under finance contracts; guaranteed asset protection (GAP) to cover the difference between an insurer�� settlement and the asset value in the event of a total loss, and general liability, employers��liability, public liability, negligence of advisors and liability of health care providers and medical facilities.
The Company's extended warranty business covers selected consumer and commercial goods and other risks, including personal computers; consumer electronics, such as televisions and home theater components; consumer appliances, such as refrigerators and washing machines; automobiles (excluding liability coverage); furniture, and heavy equipment. The Company also serve a s a third party administrator to provide claims handli! ng and! c! all cen! ter services to the consumer products and automotive industries in the United States and Canada. It underwrites the specialty risk coverage on a coverage plan-level basis, which involves substantial data collection and actuarial analysis, as well as analysis of applicable laws governing policy coverage language and exclusions.
Specialty Program
The Company�� Specialty Program segment provides workers��compensation, package products, general liability, commercial auto liability, excess and surplus lines programs and other specialty commercial property and casualty insurance to a narrowly defined, homogeneous group of small and middle market companies. The type of risk covered by this segment is similar to the type of risk in Small Commercial Business but also covers, to a small extent, certain higher risk businesses. The coverage is offered through accounts with various agents to multiple insureds. Policyholders in this segment primarily include industries, such as retail, wholesale, service operations, artisan contracting, trucking, light and medium manufacturing, habitational and professional employer organizations. As of December 31, 2012, the Company underwrote 77 programs through 44 independent wholesale and managing general agents. Workers��compensation insurance consists approximately 33% of this business during the year ended December 31, 2012.
Personal Lines Reinsurance
The Company�� Personal Lines Reinsurance Segment has a 20% participation in the Personal Lines Quota Share, by which it receive 10% of the net premiums of the personal lines business. The Personal Lines Quota Share provides that the reinsurers, severally, in accordance with their participation percentages, will receive 50% of the net premium of the GMACI Insurers and assume 50% of the related net losses.
Hot Insurance Stocks To Watch Right Now: CNO Financial Group Inc. (CNO)
CNO Financial Group, Inc., through its subsidiaries, engages in the development, marketing, and administration of health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States. The company markets and distributes Medicare supplement insurance, interest-sensitive and traditional life insurance, fixed annuities, and long-term care insurance products; Medicare advantage plans through a distribution arrangement with Humana Inc.; and Medicare Part D prescription drug plans through a distribution and reinsurance arrangement with Coventry Health Care. It also markets and distributes supplemental health, including specified disease, accident, and hospital indemnity insurance products; and life insurance to middle-income consumers at home and the worksite through independent marketing organizations and insurance agencies. In addition, the company markets primarily graded benefit and simplified issue life insurance products directly to customers through television advertising, direct mail, Internet, and telemarketing. It sells its products through career agents, independent producers, direct marketing, and sales managers. CNO Financial Group, Inc. has strategic alliances with Coventry and Humana. The company was formerly known as Conseco, Inc. and changed its name to CNO Financial Group, Inc. in May 2010. CNO Financial Group, Inc. was founded in 1979 and is headquartered in Carmel, Indiana.
Advisors' Opinion:- [By Jonas Elmerraji]
Up first is CNO Financial Group (CNO), a mid-cap financial stock that's rocketed close to 60% higher since the calendar flipped over to January. Yup, it's been a great year for the market, but it's been a far better one for investors who own CNO. But that strong performance isn't showing any signs of slowing yet. In fact, CNO looks primed for even more upside in the fourth quarter.
That's because CNO is currently forming a bullish pattern called an ascending triangle. The ascending triangle pattern is formed by a horizontal resistance level above shares -- in this case at $14.75 -- and uptrending support to the downside. Basically, as CNO bounces in between those two technical price levels, it's getting squeezed closer and closer to a breakout above that $14.75 resistance level. When that breakout happens, it's time to become a buyer.
ACCO's price action isn't exactly textbook. After all, the pattern is coming in at the bottom of a downtrend, not after an uptrend. But ultimately, that doesn't change the trading implications of a move through that $7.50 level.
Whenever you're looking at any technical price pattern, it's critical to think in terms of those buyers and sellers. Ascending triangles and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.
That $7.50 resistance level is a price where there has been an excess of supply of shares; in other words, it's a place where sellers have been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above it so significant. The move means that buyers are finally strong enough to absorb all of the excess supply above that price level.
Don't be early on this trade.
- [By Vanin Aegea]
I have heard many people comment about the insurance policies for cars, houses, life, assets, etc. The arguments always revolve around the same issue: Is it really necessary? What are the chances to be hit by a Hurricane, or to meet a sudden death? Well, nobody really knows. Some individuals however, sleep better when they know a policy backs their life investments. Here, I will look into three insurance companies that concentrate on different policies, or geographies. These are: China Life (LFC), and Conseco (CNO).
Hot Insurance Stocks To Watch Right Now: Fairfax Financial Holdings Ltd (FRFHF.PK)
Fairfax Financial Holdings Limited (Fairfax) is a financial services holding company. The Company, through its subsidiaries, is principally engaged in property and casualty insurance and reinsurance and the associated investment management. The Company�� segments consist of Insurance, Reinsurance, Insurance and Reinsurance Other, Runoff, and Corporate and Other. On December 22, 2011, the Company completed the acquisition of 75% interests in Sporting Life Inc. On August 16, 2011, the Company acquired William Ashley China Corporation. On March 24, 2011, an indirect wholly owned subsidiary of Fairfax completed the acquisition of The Pacific Insurance Berhad. On February 9, 2011, an indirect wholly owned subsidiary of Fairfax completed the acquisition of First Mercury Financial Corporation. In October 2012, its RiverStone runoff subsidiary acquired all the outstanding shares of Brit Insurance Limited.
Advisors' Opinion:- [By Alex Jordon]
There's talk that Prem Watsa, head of Fairfax Financial Holdings (FRFHF.PK), could possibly be involved in a privatization bid for the company. Consider:
- [By Infinity Group]
With 515 million shares outstanding, this equates to 33% of all shares being shorted. It should also be noted that Prem Watsa's Fairfax Financial Holdings (FRFHF.PK) is holding 51.8 million BlackBerry shares. Prem Watsa stated at the annual FairFax shareholders meeting that Fairfax is holding a long position with BlackBerry and anticipates shareholder value increasing over the next 2-3 years. The cost basis for FairFax financial holdings is approximately $17 per BlackBerry share.
Hot Insurance Stocks To Watch Right Now: Cigna Corp (CI)
Cigna Corporation (Cigna), incorporated on November 3, 1981, is a holding company. Cigna is a global health service company, with insurance subsidiaries that are providers of medical, dental, disability, life and accident insurance and related products and services. In the United States, these products and services are offered through employers and other groups, and in selected international markets, Cigna offers supplemental health, life and accident insurance products and international health care coverage and services to businesses, governmental and non-governmental organizations and individuals. The Company also has certain run-off operations, including a Run-off Reinsurance segment. Cigna�� revenues are derived from premiums, fees, mail order pharmacy, other revenues and investment income. Cigna operates in five segments: Health Care, Disability and Life, International, Run-off Reinsurance, and Other Operations, including Corporate-owned Life Insurance. On January 31, 2012, Cigna acquired HealthSpring, Inc. On November 30, 2011, the Company acquired FirstAssist Group Holdings Limited. In August 2012, the Company acquired Great American Supplemental Benefits from American Financial Group, Inc. In January 2013, the Company acquired select Arcadian and Humana Medicare Advantage plans in Arkansas, Oklahoma and Texas. In September 2013, Cigna Corporation completed its acquisition of Alegis Care, a portfolio company of Triton Pacific Capital Partners. Effective September 3, 2013, Cigna Corp acquired Home Physicians Management LLC.
Health Care
Cigna�� Health Care segment (Cigna HealthCare) offers insured and self-insured medical, dental, behavioral health, vision, and prescription drug benefit plans, health advocacy programs and other products and services that may be integrated to provide health care benefit programs. Cigna HealthCare companies offer these products and services in all 50 states, the District of Columbia and the United States Virgin Islands. Cigna offers a ! range of products and services to employers and other groups that sponsor group health plans. With the exception of Health Maintenance Organization (HMO), Medicare, Voluntary and stop loss products, each of Cigna HealthCare�� products is offered with alternative funding options. Cigna may sell multiple products under the same funding arrangement to the same employer. Approximately 85% of the Company�� medical customers are enrolled in self-insured plans, with the remainder split between guaranteed cost and experience-rated insured plans. Approximately 90% of its medical customers are enrolled in self-insured and experience-rated plans. Cigna also offers guaranteed cost medical and dental insurance to individuals. Cigna HealthCare offers a product line of indemnity managed care benefit plans on an insured (guaranteed cost or experience-rated) or self-insured basis. The Network, Network Open Access, and Open Access Plus In-Network products cover only those services provided by Cigna HealthCare participating health care professionals (in-network) and emergency services provided by non-participating health care professionals (out-of-network). The Network point of service (POS), Network POS Open Access and Open Access Plus plans (OAP) cover health care services provided by participating, and non-participating health care professionals.
Cigna HealthCare offers a Preferred Provider Plans (PPO) product line that features a national network. Like Network and Open Access Plus Plans, the PPO product line is offered on an insured (guaranteed cost or experience-rated) or self-insured basis. Cigna HealthCare offers the Cigna Choice Fund suite of products, including Health Reimbursement Accounts (HRA), Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA). Cigna HealthCare offers stop loss insurance coverage for self-insured plans. This stop loss coverage reimburses the plan for claims in excess of a predetermined amount, either for individuals (specific) or the entire group (aggregate), ! or both. ! Cigna HealthCare provides Taft-Hartley trusts and other entities access to its national provider network and provides claim re-pricing and other services. Cigna HealthCare�� voluntary medical products are offered to employers with 51 or more eligible employees. As a result of the acquisition of HealthSpring, Cigna operates Medicare Advantage coordinated care plans in 11 states and the District of Columbia. Under the Medicare program, Medicare-eligible beneficiaries may receive health care benefits, including prescription drugs, through a managed care health plan, such as the Company�� coordinated care plans, and The Centers for Medicare and Medicaid Services reimburse the Company pursuant to a risk adjustment payment methodology.
Cigna�� Medicare Part D prescription drug program, Cigna Medicare Rx, provides a number of plan options, as well as service and information support to Medicare and Medicaid eligible customers. Cigna Medicare Rx is available in all 50 states and the District of Columbia. Cigna HealthCare offers medical management, disease management, and other health advocacy services to employers and other plan sponsors. These services are offered to customers covered under Cigna HealthCare administered plans, as well as individuals covered under plans insured and/or administered by competing insurers/third-party administrators. Cigna�� onsite services include more than 75 health centers and the annual administration of more than 400,000 biometric screenings, as well as approximately 2,200 wellness seminars each year. As a result of the acquisition of HealthSpring, Cigna operates three LivingWell Health Centers, where Medicare customers can receive care from physicians, nurse practitioners, nurses, pharmacists, and nurses educators. Cigna arranges for behavioral health care services for customers through its network of participating behavioral health care professionals. Cigna offers behavioral health care case management services, employee assistance programs (EAP), and wor! k/life pr! ograms to employers, Government entities and other groups sponsoring health benefit plans. As of December 31, 2011, Cigna�� behavioral national network had approximately 108,000 access points to psychiatrists, psychologists and clinical social workers and approximately 9,000 facilities and clinics.
Cigna Pharmacy Management offers prescription drug plans to its insured and self-funded customers both in conjunction with its medical products and on a stand-alone basis. With a network of over 62,000 contracted pharmacies, Cigna Pharmacy Management is a pharmacy benefits manager (PBM) offering clinical integration programs, specialty pharmacy solutions and home delivery of prescription medicines. Cigna�� specialty pharmacy outcome management program, TheraCare, manages specialty conditions. TheraCare is coordinated with other Cigna health advocacy programs and all data is captured for analysis and reporting. Cigna Dental Health offers a variety of dental care products, including dental health maintenance organization plans (Dental HMO), dental preferred provider organization (DPPO) plans, dental exclusive provider organization plans, traditional dental indemnity plans and a dental discount program. As of December 31, 2011, Cigna Dental Health customers totaled approximately 10.9 million. Managed dental care products are offered in 38 states for Dental HMO and 43 states and the District of Columbia for Dental PPO through a network of independent health care professionals that have contracted with Cigna Dental Health to provide dental services. Cigna Dental Health customers access care from the dental PPO network in the United States and one of the dental HMO networks in the United States, with approximately 235,500 DPPO-contracted access points (approximately 92,000 health care professionals) and approximately 58,000 dental HMO-contracted access points (approximately 16,500 health care professionals).
Disability and Life
Cigna�� Disability and Life segment (Cign! a Disabil! ity and Life) provides insurance products and their related services, such as group long-term and short-term disability insurance, group life insurance and accident and specialty insurance. These products and services are provided by subsidiaries of Cigna Corporation. Cigna Disability and Life markets products in all 50 states, the District of Columbia, Puerto Rico, the United States Virgin Islands and Canada. Cigna Disability and Life also provides assistance to employees in returning to work and assistance to their employers in managing the cost of employee disability. Cigna Disability and Life offers personal accident insurance coverage, which consists primarily of accidental death and dismemberment and travel accident insurance to employers. Group accident insurance may be employer-paid or employee-paid. Cigna Disability and Life also offers specialty insurance services that consist primarily of disability and life, accident, and hospital indemnity products to professional or trade associations and financial institutions.
International
CIGNA�� International segment (CIGNA International) offers supplemental health, life and accident insurance products, as well as international health care products and services. These products and services are provided by subsidiaries of Cigna Corporation, including foreign operating entities. Cigna International provides employers, affinity groups and individuals with local and global health care and related financial protection programs. Supplemental health products provide a specified payment for a range of health risks and include personal accident, accidental death, critical illness, hospitalization, travel, dental, cancer and other dread disease coverages. Term life, as well as variable universal life insurance and other savings products are also included in the product portfolio. Cigna International�� supplemental health, life and accident insurance products are offered in South Korea, Taiwan, Indonesia, Hong Kong, the European Un! ion, Chin! a, New Zealand, Thailand and Turkey. In China, Cigna International owns a 50% interest in a joint venture through, which its products and services are offered. Cigna International�� health care businesses primarily consist of products and services to meet the needs of local and multinational companies and organizations and their local and globally mobile employees and dependents. These products and services include insurance and administrative services for medical, dental, vision, life, accidental death and dismemberment, and disability risks. In addition, Cigna International�� health care businesses include products and services, which are primarily provided through group benefits programs to employees of businesses and other organizations in the United Kingdom and Spain. These products and services include medical indemnity insurance coverage, with some offerings having managed care or administrative service aspects.
Run-off Reinsurance
Cigna�� reinsurance segment reinsured guaranteed minimum death benefits (GMDB) (also known as variable annuity death benefits (VADBe)), under certain variable annuities issued by other insurance companies. These variable annuities are investments in mutual funds combined with a death benefit. The Company purchased retrocessional protection that covers approximately 5% of the assumed risks. The Company also maintains a dynamic hedge program. Cigna also reinsured guaranteed minimum income benefits (GMIB) under certain variable annuities issued by other insurance companies. These variable annuities are investments in mutual funds combined with minimum income and death benefits. These products under Cigna�� Run-off Reinsurance segment were sold principally in North America and Europe through a sales force and through intermediaries.
Other Operations
The principal products of the Corporate-owned Life Insurance (COLI) business are permanent insurance contracts sold to corporations to provide coverage on the lives ! of certai! n employees for the purpose of funding employer-paid future benefit obligations. The principal services provided by the COLI business are issuance and administration of the insurance policies. COLI policies provide a death benefit for which Cigna collects fees to cover mortality risk. COLI policies also allow policy owners to borrow against a portion of their cash surrender value.
Advisors' Opinion:- [By Lee Jackson]
Cigna Corp.‘s (NYSE: CI) solid business momentum and strong Medicare Advantage and International segment positioning continue to leave a positive risk-reward level, with the stock trading at a low 9.5 times 2014 earnings per share estimates. The J.P. Morgan analysts particularly like the name, given Cigna’s below-average exposure to the 2014 health care reform uncertainty. They raise their price target from $78 to $87. The consensus price target for the stock is $85. Investors are paid a tiny 0.1% dividend.
Hot Insurance Stocks To Watch Right Now: MGIC Investment Corp (MTG)
MGIC Investment Corporation (MGIC), incorporated June 21, 1984, is a holding company and through wholly owned subsidiaries is a private mortgage insurer in the United States. As of December 31, 2012, its principal mortgage insurance subsidiaries, Mortgage Guaranty Insurance Corporation (MGIC) and MGIC Indemnity Corporation (MIC), were each licensed in all 50 states of the United States, the District of Columbia and Puerto Rico. During the year ending December 31, 2012, the Company wrote new insurance in each of those jurisdictions in MGIC and/or MIC. The Company capitalized MIC to write new insurance in certain jurisdictions where MGIC no longer meets, and is unable to obtain a waiver of, those jurisdictions��minimum capital requirements. Private mortgage insurance covers losses from homeowner defaults on residential mortgage loans, reducing and, in some instances, eliminating the loss to the insured institution if the homeowner defaults.
Mortgage Insurance
Primary insurance provides mortgage default protection on individual loans and covers unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure. Primary insurance is written on first mortgage loans secured by owner occupied single-family homes, which are one-to-four family homes and condominiums. Primary insurance is also written on first liens secured by non-owner occupied single-family homes, which are referred to in the home mortgage lending industry as investor loans, and on vacation or second homes. Primary coverage can be used on any type of residential mortgage loan instrument approved by the mortgage insurer.
When a borrower refinances a mortgage loan insured by the Company by paying it off in full with the proceeds of a new mortgage that is also insured by it, the insurance on that existing mortgage is cancelled, and insurance on the new mortgage is considered to be new primary insurance written. Therefore, continuation of its coverage fr! om a refinanced loan to a new loan results in both a cancellation of insurance and new insurance written. When a lender and borrower modify a loan rather than replace it with a new one, or enter into a new loan pursuant to a loan modification program, its insurance continues without being cancelled assuming that the Company consent to the modification or new loan.
The borrower�� mortgage loan instrument requires the borrower to pay the mortgage insurance premium. There are several payment plans available to the borrower, or lender, as the case may be. Under the monthly premium plan, the borrower or lender pays it a monthly premium payment to provide only one month of coverage. Under the annual premium plan, an annual premium is paid to it in advance, and it earns and recognizes the premium over the next 12 months of coverage, with annual renewal premiums paid in advance thereafter and earned over the subsequent 12 months of coverage. Under the single premium plan, the borrower or lender pays it a single payment covering a specified term exceeding twelve months.
Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan, which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. In general, the loans insured by it in Wall Street bulk transactions consisted of loans with reduced underwriting documentation; cash out! refinanc! es, which exceed the standard underwriting requirements of the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively GSEs); A- loans; subprime loans, and jumbo loans.
Other Products and Services
The Company has participated in risk sharing arrangements with the GSEs and captive mortgage reinsurance arrangements with subsidiaries of certain mortgage lenders, which reinsure a portion of the risk on loans originated or serviced by the lenders, which have MGIC primary insurance. It provides information regarding captive mortgage reinsurance arrangements to the New York Department of Insurance (known as the New York Department of Financial Services), the Minnesota Department of Commerce and the Department of Housing and Urban Development, (HUD). It performs contract underwriting services for lenders, in which it judges whether the data relating to the borrower and the loan contained in the lender�� mortgage loan application file comply with the lender�� loan underwriting guidelines. It also provides an interface to submit data to the automated underwriting systems of the GSEs, which independently judge the data. These services are provided for loans, which require private mortgage insurance, as well as for loans that do not require private mortgage insurance. It provides mortgage services for the mortgage finance industry, such as portfolio retention and secondary marketing of mortgages.
The Company competes with Federal Housing Administration, Veterans Administration, PMI Mortgage Insurance Company, Genworth Mortgage Insurance Corporation, United Guaranty Residential Insurance Company, Radian Guaranty Inc., CMG Mortgage Insurance Company, and Essent Guaranty, Inc.
Advisors' Opinion:- [By Dan Caplinger]
Genworth's results are consistent with the gains that its mortgage-insurance peers have experienced. Both Radian Group (NYSE: RDN ) and MGIC Investment (NYSE: MTG ) have posted impressive gains that have attracted the attention of hedge-fund investors seeking to capitalize on the strengthening housing market. Yet in the long run, the question that faces the entire industry is whether lenders will even want to make mortgage loans with inadequate down payments that require mortgage insurance in the first place. Some would argue that tighter lending standards would make mortgage insurance unnecessary, while others note that lenders might choose to demand insurance beyond the current standards of roughly 20% to 25% home equity that have historically triggered the contractual need for purchase-money insurance in mortgage contracts.
- [By Amanda Alix]
Hot on the heels of a $15 million Consumer Financial Protection Bureau settlement with mortgage insurers Genworth Financial (NYSE: GNW ) , MGIC Investment (NYSE: MTG ) , Radian Group (NYSE: RDN ) , and United Guaranty, a subsidiary of AIG (NYSE: AIG ) , over kickbacks�paid to banks for mortgage insurance, comes some bad news in the same vein -- this time, for Bank of America (NYSE: BAC ) .
Justin Sullivan/Getty Images NEW YORK -- U.S. single-family home prices rose in August and also posted their strongest annual gain in more than seven years, a closely watched survey showed Tuesday. The S&P/Case-Shiller composite index of 20 metropolitan areas rose 0.9 percent on a seasonally adjusted basis, beating economist expectation of a 0.6 percent gain. Prices rose 0.6 percent in July. On a non-adjusted basis, prices rose 1.3 percent. Compared to a year earlier, prices were up 12.8 percent, beating economist expectations of 12.5 percent and marking the strongest gain since February 2006, when the increase was 13.8 percent. The August price gains came despite a rise that month in 30-year mortgage rates that slowed mortgage applications and refinancing activity. The report suggested the housing sector continued to recover despite those headwinds. Home prices have been rising nationally since early 2012 and economists have singled out housing as one of the bright spots of the U.S. recovery. Prices in all 20 cities rose on a non-seasonally adjusted yearly basis, led by a 29.2 percent gain in Las Vegas and followed by a 25.4 percent increase in San Francisco.
Craig Warga/Bloomberg via Getty Images WASHINGTON -- Americans bought fewer existing homes in September than the previous month, held back by higher mortgage rates and rising prices. The National Association of Realtors said Monday that sales of resold homes fell 1.9 percent last month to a seasonally adjusted annual rate of 5.29 million. That's down from a pace of 5.39 million in August, which was revised lower. The sales pace in August equaled July's pace. Both were the highest in four years and are consistent with a healthy market. Mortgage rates rose sharply over the summer from their historic lows, threatening to slow a housing recovery that began last year and has helped drive modest economic growth. But many economists expect home sales will remain healthy, especially now that rates have stabilized and remain near historically low levels. Final sales in September reflected contracts signed in July and August, when rates were about a percentage point higher than in May. The average rate on a 30-year fixed mortgage was 4.28 percent last week, down from a two-year high of 4.58 percent in August. That's also far below the 30-year average of 7 percent, according to Bankrate.com. Sales of existing homes have risen at a healthy 10.7 percent in the past 12 months. Still, that's the slowest year-over-year increase in five months. And the median home price has risen 11.7 percent in the past year, the Realtors said. That's also the slowest annual gain in the past five months. Price increases may be slowing because more homes are finally coming on the market. The supply of available homes rose 1.8 percent from a year ago to 2.21 million, the first year-over-year increase in 2 ½ years. The limited number of homes for sale is a key reason prices have risen so fast in the last year. The economy is growing modestly and employers are adding jobs at a slow but steady pace. That's helped a growing number of Americans buy homes. Still, many first-time buyers have been unable to enter the market. They made up just 28 percent of purchases in September, down from 32 percent a year ago. In healthier housing markets, they typically make up at least 40 percent of buyers. First-time buyers are having trouble qualifying for loans because many banks have adopted tougher lending restrictions and higher down payment requirements since the housing bubble burst. In their place, investors and Americans willing to pay cash are playing an outsize role in sales. Cash purchases made up 33 percent of September's sales, up from 28 percent a year ago. Borrowing rates began to rise in May after Federal Reserve Chairman Ben Bernanke suggested that the Fed could start to slow its monthly bond purchases by the end of the year. The purchases are intended to keep interest rates low and stimulate the economy. But the Fed decided against slowing its purchases at its September meeting, citing weak economic data and looming budget battles in Washington. The budget fights led to a partial government shutdown Oct. 1. The nation's borrowing limit was increased but only at the last minute. Economists have cut their forecasts for growth in the October-December quarter by about a half-percentage point because of the shutdown and debt limit fight. As a result, many economists think the Fed won't slow its bond purchases until January or even later. That's likely to keep mortgage rates low well into the new year.