Steve Wevodau

Increase in bank failures threatens insurance fund - Steve Wevodau

J. SCOTT APPLEWHITE | ASSOCIATED PRESS

Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., knows it is a burden on banks to raise the fees the agency imposes, but she says it is necessary to keep the deposit-insurance fund solvent as bank failures rise.

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PMI: No Near-Term Bottom

By Neena Mishra
PMI Group Inc’s (NYSE: PMI - News) 3Q08 reported net loss from continuing operations of $149.3 million or $1.83 per diluted share was much better-than-expectations due to lower-than-expected incurred losses. PMI also lowered its 2008 outlook for U.S. paid claims.
However, net premiums written were down 19.3% year-over-year, as the amount of new insurance fell due to the continued declines in home sales. The company had recently agreed to sell its Australian and Asian operations, which are now classified as discontinued operations.
Based on PMI’s 3Q08 financial results and its strategic and business initiatives, we are slightly moderating our FY08 and FY09 loss estimates to $9.93 per share and $2.00 per share, respectively. At current levels, shares of PMI trade at 0.08x PMI’s 3Q08 book value of $17.80 per share, which is significantly below its historical 2.2x high. The rise in delinquencies and defaults on loan payments may continue for a longer time than expected earlier, leading to increased losses for the mortgage insurers.
Further, we suspect that PMI may need to raise new capital in the coming quarters, which would result in dilution to the existing shareholders. As a result, we do not expect any correction to the multiple in the near future. Our six-month target price of $1.20 per share incorporates the current multiple of 0.08 on our projected book value of $14.50 per share for March 31, 2009. We are maintaining our Sell recommendation on the shares.

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Happy Days For Reinsurers Are A Ways Off, Expert Says

BY SUSANNE SCLAFANE

NEW YORK —Reinsurance market optimists may need to pen up their bullish forecasts a little longer, a representative of global reinsurance brokerage firm suggested at an industry conference here yesterday.
Bryon Ehrhart, president and chief executive officer of Aon Re Global Services in Chicago, gave that assessment during the 20th Annual Executive Conference for the Property-Casualty Industry presented by National Underwriter Company and sponsored by Ernst & Young and Dewey & LeBoeuf.
Mr. Ehrhart in his talk gave an overview of factors driving additional demand for reinsurance and impediments to reinsurance program increases.
His view was expressed even as he agreed with some of the factors that reinsurance company executives have mentioned in third quarter earnings reports as pointing to increased demand for reinsurance in 2009.
Unlike these positive forecasters however, Mr. Ehrhart, looked at the first factor—a disappearance of insurer cushions of capital—and a very long list of additional demand drivers and weighed them against a shorter, but formidable list of impediments. This led him to conclude that insurers may continue to increase their retentions going forward.
Referring to the optimistic commentary from reinsurers, he said, “There has been speculation that there will be a bull reinsurance market,” which caused reinsurance company stocks to react favorably recently. The “premature rally,” however, has already “come in some,” he said, attributing the short life of the rally to the realization of “a disconnect” between buyers and sellers.
Going on to describe what he meant by the term “disconnect,” Mr. Ehrhart said reinsurers are also suffering reasonably significant capital declines.
“If you buy more reinsurance, who are you going to buy it from?” he asked.
“Intuitively, the right risk management move when capital is down from the supplier of risk-taking capacity is that you buy less … from them. That’s general fundamentals,” he said.
Earlier in his presentation, Mr. Ehrhart presented numbers showing that insurer capital declines have been steeper than reinsurer declines.
Overall, a group of insurers he tracked, which had $366 billion at the end of fourth-quarter 2007, lost 19.4 percent of their capital by the end of third-quarter 2008.
On the reinsurance side, capital fell only 8.2 percent in the same period for a group of reinsurers that had $360 billion in capital as of fourth-quarter 2007. But while some large companies, like Berkshire-Hathaway, had no capital change, others have suffered “reasonable declines” that will get the attention of ceding companies.
Three of the larger reinsurers have capital drops ranging between 15 and 20 percent through the third quarter, he said, without identifying them. “While that’s better than we’re going to see for a lot of insurers, it is material enough that it’s not going to go unnoticed,” he said.
There are significant reinsurers that “are possibly even facing control changes or other uncertainties,” he said.
In addition, reinsurers that “qualified on the margin last year” for the reinsurance programs—in other words, who just hit cedents’ credit quality thresholds with ratings of “A-minus” from A.M. Best and “BBB-something” Standard & Poor’s—now have lower capital cushions than they had last year. That means “clients are going to be more cautious about buying from people with those ratings,” he said.
“And then there’s the price,” he continued. There’s been a lot of talk about insurance prices stabilizing, but not necessarily any indication that “new money is flowing in the door” from insurance rate hikes.
Speaking from the perspective of an insurer, he asked, “How am I going to spend more going out the door” to buy the higher levels of reinsurance protection “without more coming in the door?”
That will cause insurers to wait—“if they’re going to buy more, to do it after they see the money flowing in.”
In efforts to increase the inflow of dollars, insurers may try to grow their business in 2009, but “there’s real growth risk when there is real competition on the Street for business,” Mr. Ehrhart noted.
“While there is some $30-$40 billion worth of premiums in companies that have difficult economic circumstances in their own books, there’s still competition for moving that business,” he said.
On the reinsurance side, after two years of reinsurance price declines, insurers know that the cost of reinsurance is going up. Therefore, he concluded, “you are going to see people [cedents] defeating some of that price increase with raised retentions.”
This is counterintuitive, since lower insurer capital levels should coincide with lower risk tolerance, he conceded. “I think it’s probably something that will occur even though it feels unnatural,” he said.
On the demand side, in addition to the disappearance of insurer cushions of capital, Mr. Ehrhart, a greater respect for model uncertainty, and a $12.0-14.5 billion shortfall in the Florida Hurricane Catastrophe Fund are factors working the opposite direction—potentially fueling more reinsurance demand in line with more bullish predictions.

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Aegon’s bid for U.S. rescue cash doomed

By Jonathan Gould - Analysis
FRANKFURT (Reuters) - A Dutch insurer’s experimental bid to tap the U.S. government for bailout cash looks doomed to failure, closing off an avenue for other insurers.
Aegon NV said this week it was mulling buying a small U.S. bank to qualify for potentially more than $1 billion in U.S. government support.
The insurer plans to talk with the U.S. Treasury about gaining access to the Troubled Asset Relief Program, which the U.S. government is using to help banks hit by the financial crisis. Foreign insurers are now barred from using the fund.
“If there is a high chance that we could use the TARP programme in the future, then we are willing to buy a small thrift (savings bank). If not, then we will not buy it,” Aegon Chief Financial Officer Jos Streppel told Reuters on the margins of a financial conference.
The plan is similar to those of Hartford, a life and property insurer that has been hit by investment losses and in which Germany’s Allianz owns a stake, as well as peers Genworth Financial Inc and Lincoln National Corp, which are all planning to buy small savings and loans companies and apply for federal support.
Aegon already got a 3 billion euro ($3.8 billion) capital injection from the Dutch government last month to strengthen a capital base eroded by investment losses and exposure to risky assets.
The insurer will have to repay the Dutch government at a premium or pay a steep 8.5 interest rate to use the cash, opening an arbitrage opportunity if U.S. TARP funds are cheaper.
“The capital of Aegon is totally unchanged,” Aegon’s Streppel said. “I don’t need more money but I might replace a part of the 3 billion euros with U.S. money,” he said.
Dutch regulators have no problem with the strategy.
“If the United States has more leeway in granting capital support at more favorable terms (than we do), then who am I to tell Aegon not to use it,” Dutch National Bank Director for Supervisory Policy Klaas Knot told Reuters.
“Aegon has to compete in the North American market with other North American life insurers that will have access to the package under the same terms and conditions,” Knot said.
NOT SO FAST
Financial watchdogs point out that Europe’s insurers have been little affected by the financial crisis compared with their banking counterparts.
But with a host of state-sponsored guarantee schemes on offer throughout the developed economies - from enhanced deposit insurance to outright share purchases of troubled financial houses - regulators are keen to avoid giving companies an unfair competitive advantage.
Politicians were likely to intervene if they thought companies were angling to arbitrage between rescue funds, analysts said.
“Governments just won’t allow that sort of thing. They would bring in new rules to stop it right away,” said a Frankfurt-based analyst, who asked not to be identified.
“We hope that it won’t lead to financial distortions between centers… but no one can exclude that it might,” said Thomas Steffen, chairman of EU insurance regulatory group CEIOPS and head of insurance supervision at German watchdog Bafin.
The U.S. would be particularly wary of foreign companies trying to tap the TARP through the back door, analysts said.
“If it came down to a mass-arbitrage, where European insurers started buying U.S. savings banks just to get access to the TARP programme, there would be an immediate political reaction against it,” said a second Germany-based analyst.
“I don’t think the Aegon model will do the rounds.”

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Commercial loan losses hurting insurers

By Marcy Gordon, AP Business Writer

New wave of commercial loan defaults hitting insurers, may be weighing on stock market
WASHINGTON (AP) — A new wave of loan defaults, this time tied to commercial mortgages, is starting to hit insurance companies and may be contributing to the stock market’s woes.
Industry players say the insurers’ predicament is being worsened by a rule requiring that mortgage assets be valued at current market prices — a mandate that federal regulators are re-examining.
The industry’s growing threats are forcing some radical changes. Some insurers, including Hartford Financial Services Group Inc., Genworth Financial Inc. and Lincoln National Corp., are applying to the government to buy thrifts so they can qualify for some of the federal bailout money that’s being injected into financial companies.
Insurers and other financial institutions have been pressing the Securities and Exchange Commission to ease accounting rules for their soured assets. And Citigroup Inc. and other big banks are lobbbying the SEC on another front: to reinstate a temporary ban on short selling stocks in financial companies. In a short sale, investors sell shares they don’t own — something banks say has helped drive down their stocks.
Analysts worry about insurance companies’ deep exposure to securities backed by commercial mortgages, as well as potential losses on variable annuities. The annuities are policies that guarantee periodic payments to the investors.
Craig Peckham, an equity trading strategist at Jefferies & Co. in New York, said he’s starting to see fear in the market over signs of deterioration in commercial mortgage securities.
Until recently, he said, those securities had been relatively immune from the meltdown in home-loan securities. “And now we’re starting to see real default fears.”
Shares of life insurers have plummeted amid the anxiety. Genworth shares have lost about 90 percent of their value this year. MetLife Inc. has lost around 60 percent. State regulators are considering new ways of helping insurers boost their capital.
Hartford stock closed Thursday at $5.57, down $1.31 or 19 percent, while Genworth shares slipped 3 cents, or 2.9 percent, to 99 cents. Lincoln National plunged 30.6 percent, or $2.24, to $5.07.
Because many insurers loaded up on commercial mortgage securities, they seem particularly vulnerable. Yet the potential dynamite of the securities threatens not just insurers but financial companies generally. Commercial mortgage securities may be emerging as the next big worry in a distressed market.
“Whoever’s in the financial industry is at risk in this,” said Edward Ketz, an associate professor of accounting at Pennsylvania State University.
Banks and others argue that matters are made worse by accounting rules known as “fair market value” or “mark to market.” Those rules require banks to value assets on their balance sheets at current market prices, even if they plan to hold them for years. The rules have forced financial institutions to take hundreds of billions of dollars of write-downs on home-mortgage securities since the collapse of the housing market.
“The current financial situation we’re in has been significantly exacerbated by the mark-to-market rules,” said Wayne Abernathy, an executive vice president of the American Bankers Association.
In the center is the Securities and Exchange Commission. The banking industry has lobbied heavily for the SEC to suspend the requirement. In the $700 billion bailout package, Congress directed the SEC to issue a study of the mark-to-market issue by Jan. 2. The law also affirms the SEC’s authority to suspend it — a change won by the industry’s Republican allies in Congress. The study underway includes a look at the rule’s effect on bank failures.
But proponents of the current accounting rules, including analysts and investor advocates, argue that suspending the rules would weaken transparency in companies’ financial statements and hurt investors and the capital markets.
The SEC seems unlikely to move to suspend the mark-to-market requirement. But banks want changes they say would more fairly reflect the value of soured assets and the prices they could potentially fetch later, once mortgage markets rebound.
The American Council of Life Insurers urged the SEC in a letter “to conceptually revisit fair value from a long-term perspective in light of what we have learned during the recent credit crisis.”
The SEC has held two public forums on the issue. Another is scheduled Friday, gathering investors, accountants and business executives and representatives from the Treasury Department, the Federal Reserve and other regulatory agencies.
Delinquencies on securities tied to commercial mortgages stood at 0.53 percent at mid-year, up from an all-time low of 0.31 percent at the same point last year, according to the Mortgage Bankers Association. The amount of new securities backed by commercial real estate loans plummeted to $12 billion in the first half of 2008 from $137 billion a year earlier.
Construction and development loans have been the fastest-growing category of troubled loans for U.S. banks. Many banks have heavy concentrations of them in their lending portfolios, according to federal regulators.
“Banks with (commercial real estate) concentrations should take steps to strengthen their overall risk-management framework and maintain strong capital and loan-loss allowances,” Sheila Bair, chairman of the Federal Deposit Insurance Corp., said in guidance issued to banks earlier this year.
Some small banks are considered especially vulnerable. Delinquent loan payments and defaults by commercial and residential developers have surged to the highest levels since the early 1990s — the latter part of the savings and loan crisis.
As commercial mortgages have been packaged into securities and sold to investors, as with residential mortgages, the market for the securities has been damaged by the wave of defaults.

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U.S. Insurance Regulation Seems Certain, Insurance Execs Say

BY PHIL GUSMAN
NU Online News Service
NEW YORK —Insurance executives said today that the current mood in Congress, given the U.S. financial troubles, indicates some form of federal insurance regulation has become a matter of “when,” rather than “if.”
Their comments came during a panel discussion at the 20th Annual Executive Conference for the Property-Casualty Industry produced by National Underwriter Company with sponsors Ernst & Young and Dewey & LeBoeuf
Panel member Stanley A. Galanski, president and chief executive officer, The Navigators Group, Inc. said the pace towards federal regulation is fast.
The feeling among some legislators, he said, is that insurance is part of financial services, and Congress is determined to fix it. Mr. Galanski compared the current environment in Congress to the mood just before Sarbanes-Oxley was passed.
Future federal regulation may not even be “optional,” according to George Fay, executive vice president, Worldwide Property-Casualty for CNA. He said he believes there will be federal regulation of insurance that all companies will have to comply with to some degree, possibly in addition to state regulations.
Mr. Fay suggested larger companies will likely be able to adapt to this environment more easily than smaller companies.
John Q. Doyle, president and CEO, AIG Commercial Insurance, wondered what a federal regulation system in the U.S. would look like. He noted that, around the world, regulators are primarily interested in solvency, whereas in the U.S., there is more concern over consumer issues. He said he would be interested to see if the U.S. regulatory system would change its focus under federal regulation.
At a separate session during the conference, Pierre L. Ozendo, member of the executive board, chairman, and chief executive officer of Swiss Re American Corporation, said the United States should look to an Optional Federal Charter as a way to effectively prepare for regulatory systems around the world that will become more global with respect to coordination and cooperation.
Answering a question regarding whether the current U.S. insurance regulatory system is ready to coordinate on a global scale, Mr. Ozendo said an OFC would allow the U.S. to have a regulator that would be able to hold discussions with regulators in Europe and elsewhere.
Sam Friedman, editor-in-chief of National Underwriter, questioned whether federal regulation would be more effective than the states given the problems that have occurred in the federally-regulated banking sector during the current financial troubles.
Mr. Ozendo responded that there is no way to determine exactly how effective the government would be at regulating insurance, but he maintained that federal officials are the only ones with the “sheer power” to get a system that is stuck moving again.
Mr. Galanski furthered Mr. Ozendo’s point regarding international cooperation, stating he believes the debate in Washington has moved from state versus federal regulation to federal versus international cooperation.
Mr. Doyle did not say whether he would prefer a state or federal regulation system, but stressed there needs to be more effective regulation with respect to insurance.
Mr. Fay said he is not a fan of more government involvement in insurance. A future problem, he said, could be fixing problems ahead created by the very government that is trying to solve current issues.
Speaking beyond regulation, to solutions to the financial troubles in general, Mr. Fay said he would like to see some time pass by before major changes to the financial services landscape are made. He said it would be beneficial to wait until the true problems are identified, and the country can effectively analyze how it got to this point, before effecting solutions on the insurance industry.

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Canadian investors sue AIG, officers

By Dave Lenckus
Nov. 19, 2008
LONDON, Ontario—American International Group Inc. and several current and former officers of the troubled insurance holding company are the first U.S. defendants sued under a 2005 provision of the Ontario Securities Act, according to the plaintiff’s attorney.
The proposed class action litigation seeks $550 million in damages.
In addition to AIG, the lawsuit names subsidiary AIG Financial Products Corp., which wrote the risky financial guarantees for mortgage-backed securities that have threatened AIG’s financial viability.
Among the 10 individuals named as defendants are former Chief Executive Officer Martin J. Sullivan and former Chairman Robert B. Willumstad, who replaced Mr. Sullivan as CEO in June. The Federal Reserve Board replaced Mr. Willumstad in September with former Allstate Corp. CEO Edward M. Liddy as part of the government’s bailout of the company.
The lawsuit was filed on behalf of all Canadian AIG investors that acquired AIG securities from Nov. 10, 2006, through Sept. 16, 2008.
In the lawsuit, filed in the Ontario Superior Court of Justice in Kitchener, Ontario, an individual investor contends that AIG maintained in its Securities Exchange Commission filings and company officials verbally assured investors that the financial guarantees, known as credit default swaps, were safe instruments that could not produce losses under any “reasonable” scenario.
“Indeed, in September 2007—a year before the market was made aware of the severity and scope of the problem—AIG was told by its auditors that there were problems in how AIG was accounting for its derivative products. The defendants concealed this information,” the lawsuit asserts.
A spokesman for AIG said the company does not comment on lawsuits.
Under Part XXIII.1 of the Ontario Securities Act, which was adopted in 2002 and went into effect in late 2005, Canadian investors can sue in Canadian courts in an effort to recover damages from companies that either are not Canadian or are not listed on the Toronto Stock Exchange. Previously, Canadian investors had to sue those defendants in their own jurisdictions.

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ACE Stock Falls On Citi’s Downgrade

BY DANIEL HAYS

Citigroup sent ACE Limited stock plummeting yesterday after Citi Investment Research said it was downgrading shares to hold status and lowering its earnings per share expectations.
The move sent the Bermuda-based insurer’s stock on the New York Stock Exchange down 19.76 percent to close at $40.45 per share, down from $50.41 as the Dow Jones Industrial average fell 427.47 points
Its action came, Citigroup said, after ACE’s disclosure that its exposures from premiums and claims from variable annuity contracts reinsuring Guaranteed Minimum Death Benefits (GMDB and Guaranteed Minimum Income Benefits (GMIB) “increased dramatically over the past nine months.”
Citigroup said while losses are limited to a maximum per year loss cap, there was a concern because of the number of policies involved, mortality rates, market performance and insureds’ decisions to annuitize.
According to the bank’s analysts, losses of $100 million to $130 million a year are possible.
ACE reacted with a statement that while the Net Amount at Risk (NAR) associated with its death benefit variable annuities was $6.5 billion at Sept 30, the NAR is a metric indicating total exposure if all covered individuals were to die and “such a scenario is obviously extremely unlikely and no company assumes this event will ever happen.”
The company said its financial 10k filing with the Securities and Exchange Commission “clearly indicates that the variable annuity reinsurance business has no cash flow or liquidity concerns.” As of Sept. 30 ACE said it expected to earn between $150 million and $200 million operating income from the variable annuities line in 2009.
Citi said it was adjusting its ACE earnings per share projections downwards to $7.75 for 2008, $6.95 for 2009, and $7.50 for 2010.
The company said it was increasing the stock risk rating to High and lowering target price to $54.
ACE dealings in GMDB and GMIB has made the insurer a “defacto put seller,” Citi said, and “The contracts ACE has engaged will cost it, should the markets decline in an unexpected and extended way.”

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Arthur J. Gallagher & Co. Acquires The HR Group, LLC

ITASCA, Ill., Nov. 19 /PRNewswire-FirstCall/ — Arthur J. Gallagher & Co. today announced the acquisition of The HR Group, LLC in Brentwood, Tennessee. Terms of the transaction were not disclosed.
Established in 1996, The HR Group is an employee benefits brokerage firm offering employee benefits products and services along with human resource management consulting and outsourced benefits administration services to their clients throughout the United States. Karen Saul and her associates will continue to operate in their current location under the direction of William Ziebell, North Central Regional Executive Vice President of Gallagher’s employee benefit consulting and brokerage operations.
“Over the last decade, The HR Group has built a solid reputation for controlling their clients’ employee benefits costs while maintaining a track record of profitable growth,” said J. Patrick Gallagher, Jr., Chairman, President and CEO. “With their comprehensive suite of human resource consulting/employee benefits products and services and their results-driven culture, The HR Group will be an outstanding addition to our employee benefit brokerage operations. We are pleased to welcome Karen and her team to our growing Gallagher family of professionals.”
Arthur J. Gallagher & Co., an international insurance brokerage and risk management services firm, is headquartered in Itasca, Illinois, has operations in 14 countries and does business in more than 100 countries around the world through a network of correspondent brokers and consultants. Gallagher is traded on the New York Stock Exchange under the symbol AJG.

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How Boomers Will Confront, Impact & Adapt to the Next 20 Years

WESTPORT, Conn.–(BUSINESS WIRE)–Baby Boomers may not recognize themselves and their surroundings by the year 2028 as a result of an evolving global environment and marketplace. How they adapt and mitigate risk as we move into the future is the subject of a new project by the Institute for the Future done in conjunction with the MetLife Mature Market Institute.
Developed through ethnographic profiling of a diverse group of those born between 1946 and 1964, Boomers: The Next 20 Years, Ecologies of Risk, paints an extraordinary new picture of this much-studied demographic as they confront a longer lifespan, the widest rich-poor gap in recent generations, a global energy shortage, new economic realities and a Web-based infrastructure. The conclusion: boomers will, as they have in the past, be resourceful and self-reliant, forming economic, health and social collectives – and families of choice – to adapt to the future.
“With the world focused on the collapse of financial markets, it is especially important to understand the big picture that boomers face over the coming decades,” said Kathi Vian, ten-year forecast director for the Institute for the Future. “They have crafted complex ecologies of risks and resources throughout their adulthood, and they may well manage those ecologies with surprising skill – and sometimes surprising innovations – as they age.”
According to Boomers: The Next 20 Years, Ecologies of Risk, boomers will distribute the stress and burden of managing risk across networks of people, some based on kinship and others on affinity or interest. They will plan more, work longer and become more entrepreneurial. They will also take part in peer-to-peer networks of people that will perform some of the financial services that banks and other financial institutions perform today.
Ecologies of Risk projects the following aspects of the boomers’ lives:
• Family: New Relationships, New Responsibilities – Emerging patterns of marriage, remarriage and childbearing, including alternative family arrangements, will change the way we currently view family. Families will be “chosen,” not just inherited. There will be peer caretaking and social care matching services. Boomers will be challenged by greater distance between family members and greater responsibility for the financial well-being of children and grandchildren, contributing to slowed personal wealth accumulation.
• Global Economy: More Competition, More Collaboration – Boomers will be the first generation to age in a truly global economy, giving them access to more learning resources, new ways to collaborate, financial products from around the world and healthcare abroad, dubbed “medical tourism.”
• Community: Gaps and Gains – Boomers will use new ways to build communities to close the gap created by decreased mobility, polarization, social fragmentation and health challenges. Like their younger counterparts they will participate in online social networks, virtual retirement communities and community blogging. They will be challenged by elder abuse, anti-boomer backlash and ageist zoning laws.
• Environments: Unsustainable Pasts, Sustainable Aging – A degradation of the environment will bring risks from new diseases and fewer sustainable food and energy sources. These challenges will bring food and energy collectives, do-it-yourself (DIY) products and green technology.
• Personal: Health and Identity – Boomers will live longer, but will suffer from new chronic diseases and widespread depression from aging, illness and other concerns. They will manage their health differently with biometrics and online tools that will challenge privacy, but will allow them to share and benefit from new information found on all parts of the globe.
• Institutions: Dissatisfaction, Distrust, Reinvention – An erosion of the trust people have had in institutions will bring new banking/investment vehicles, peer-to-peer loans and new structures to manage new capitals. Financial security will be threatened by diminished government and employer safety nets and low personal savings.
“Faced with increasing longevity and the need to have lifetime income, boomers will likely reset their compasses,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “An adaptive, disciplined and flexible self is the best asset that they can bring to the future.”
Boomers: The Next 20 Years, Ecologies of Risk, is a three-phased project of how baby boomers will age over the coming decades. The first phase mapped boomers’ 20-year horizon, identifying seven big stories that will shape their future (the boomer map). The second phase consisted of interviews with boomers to define the 10 “Action Types” that help us understand how different boomers will make different choices as they confront the challenges of the future. The final phase, “Ecologies of Risk,” uses these insights to create focused forecasts of the boomers’ world. Six organizations, including major corporations and AARP, were involved in the project.
The Institute for the Future
The Institute for the Future (IFTF) is an independent nonprofit research group. The IFTF works with organizations of all kinds to help them make better, more informed decisions about the future. For more information about the IFTF visit, www.iftf.org.
MetLife Mature Market Institute®
Established in 1997, the Mature Market Institute (MMI) is MetLife’s center on aging and the 50+ market. MMI’s groundbreaking research, gerontology expertise, national partnerships and educational materials work to expand the knowledge and choices for those in, approaching or caring for those in the mature market.
MMI supports MetLife’s long-standing commitment to identifying emerging issues and innovative solutions for the challenges of life. MetLife, a subsidiary of MetLife, Inc. (NYSE: MET - News), is celebrating 140 years and is a leading provider of insurance and financial services to individual and institutional customers.

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