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European Re/Insurers On The Hook For E100 Billion In PIIGS Losses, Munich Re Leads List Of Greek Exposure
Research firm CreditSights has put together a comparison of all the major European Re/Insurer entities highlighting their exposure to PIIGS sovereign debt. In total insurers are on the hook for just under E100 billion in cross-linked exposure. The three riskiest countries, Portugal, Ireland and Greece, account for E13 billion in risk for the top 11 insurers, with Munich Re accounting for the bulk of this exposure, or E4.4 billion. However, when one adds Spain, and particularly Italy, the total notional risk surges to E96 billion. Italy, with E70 Billion in Re/Insurer risk could be the Maginot line for this business, and especially a firm like Generali which has 46.5 billion in Italian positions will likely see its fate with the next logical focal point of risk after Portugal and Spain. Munich Re's big Greek bet explains why the company is willing to participate in a Greek bailout package - in the world of sovereign bailouts throwing good money after bad is a given: the firm will do all it can to buy itself some extra time before the inevitable. Something tells us a wave of selling for the Re/Insurers may be coming quite soon.
CreditSights provides some background on its compilation methodology:
For Life companies, exposures on a gross basis reflect policyholders' and shareholders' risks to this class of assets: risks and returns of assets for life business are shared among policyholders and shareholders. For example, assuming a profit sharing of 85/15, then the amount of risk carried by shareholders is capped to 15% of investments. In the main table of country exposures below, it is therefore important to differentiate the gross from the net reported exposures. For example CNP reported its exposure on a net after tax basis. The estimate of CNP's total gross exposure is therefore in the region of of E10 billion to E31 billion, assuming profit sharing in a range of 85/15 and 95/5 respectively, and a constant 33% tax rate. Life companies benefit from some flexibility to reduce shareholders' risk by reducing the proportion of benefits/losses accruing to policyholders.
In other words, total true up gross exposure as calculated, would likely be multiples hiher than the E96 billion number presented below.
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And now? A dark scenario
Eurozone members, the IMF, and the ECB have announced significant commitments to assist debt-laden Greece. This column outlines a dark scenario in which the plan fails and contagion spreads, necessitating further assistance to other indebted Eurozone governments. That could risk high inflation or debt problems for the entire Eurozone.
http://www.voxeu.org/index.php?q=node/4987
Munich Re? Boy, that "oracle" Warren Buffet sure is brilliant.
May 2 (Bloomberg) -- Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said he personally owns 100,000 shares of German reinsurer Munich Re, a Berkshire competitor.
bob pasani SUCKS big time...the leverage world is falling apart, european markets collapsing....and from pasani "but on the bright side, ANNE TAYLOR expects better than expected earnings"..... you truly need help bob!
Yea.... The puppets on TV try to convince the sheep that " things
are OK " This is a planned Demolition of the USA ...
Even Fort Knox might be just full of Tungsten Bars...
The Buildergerg Group / IMF is trying to take over..
People of England and Europe need to get some guns and ammo..
Warren Buffet owns lots of Silver , just in case plan A fails
plan B will work... If you people don't have 200 oz. of Silver
yet... go get it , 300 oz. is better....
... and 300 oz of lead is best.
Munich Re had a big dividend very recently. It is now touching a long term support level
GoodBye Buffet...oh that would we so nice to hear!
Gold is falling down pretty quickly here. Something gives in the last hour.
The impending USD rally I've warned about since 2009 has arrived. It may last for some time too ...
MARKET UPDATES:
http://www.zerohedge.com/forum/latest-market-outlook-0
Another of the key points of pressure and great background as to the size and scope of the private bail-out options still on the table for Greece. I suspect that the private money will be called upon when the second or third of the piigs succumbs to reality.
I still say that this deal won't go through, they have agreed (said the papers) but they haven't signed on yet. Germany is looking at Portugal and Spain and saying to itself, "we need to keep this money for us and not for southern europe". Especially since there is no way that Greece is going to do those austerity plans that they "agreed" to. G-Pap will get the money and essentially sand bag the rest of Europe. Because he knows that these severe austerity measures will not be pushed because of fear of the populace.