“Some policyholders might be unaware that the well-known, conservative life insurer they purchased a policy from decades ago is now owned by a private equity firm, whose funds are illiquid and risky because of the debt financing used to buy companies.” Robert Hartwig claims, “there is an inherent tension between investors and shareholders looking to maximize returns and policyholders looking to minimize the risk of insurer insolvency.”
Leader’s Edge takes a dive looking into the effects of private equity and insurance companies. Are private equity firms deploying insurance assets into risky alternative investments or engaging in ‘self dealing’ without transparency? In hopes of answering this and other recent PE related concerns throughout the industry; the Senate Committee on Banking, Housing and Urban Affairs has asked regulators to look into risks for potential policyholders. Are private-equity owned insurers at greater risk of insolvency? You can read more about the topic and Robert Hartwig’s commentary by clicking here.