Insurers need to respond to the financial crisis with self-discipline and commonsense.
Life company chief executive officers gave that assessment here during a CEO panel at a life insurance industry executive conference.
The conference, the 19th in an annual series, was sponsored by Dewey & LeBoeuf L.L.P., New York; Ernst & Young L.L.P., New York; and Summit Business Media L.L.C., New York, the parent of National Underwriter.
David Wyss, chief economist with Standard & Poor’s Corp., New York, predicted at the conference that the U.S. will go through a moderate but long recession.
The stock market should bottom out this year, and the economy should hit bottom in the spring of 2009, Wyss said.
But consumer spending will continue to slow, because consumers are living, on average, at 139% of income, Wyss said.
If credit remains “locked up,” the prognosis could be worse, and the United States could face a “mega” recession, Wyss warned.
During the CEO panel, Patrick Mannion, president of Unity Mutual Life Insurance Company, Syracuse, N.Y., said the current situation reminds him of his experience as a volunteer firefighter.
Firefighters are taught to save themselves first and others second, and to let everything else fall into a third category, Mannion said.
Today, companies must protect their own solvency, so that they can protect policyholders and deal with the rest afterwards, Mannion said.