Michael Lies, the chief executive officer of Swiss Re — a reinsurer with a big stake in the future of the world's long-term care (LTC) financing arrangements — would like to see regulators create a new class of infrastructure investment vehicles aimed at insurers.
His argument is that, given how low interest rates are, insurers with long-term obligations need a new, liquid, regulator-approved, rating analyst-approved class of assets.
Of course, that makes a huge amount of obvious sense.
But I think issuers of insurance products that depend on the future existence of middle-income consumers should also figure out some way to invest in the commercial finance strategy needed to keep mom and pop businesses around on Main Street.
The trust fund babies who keep the world's socialist websites and protest marches going claim that the wealthy people and big corporations of the world want to steal regular people's piece of the pie and increase income inequality, not decrease it, but, obviously, that's absurd, at least in the world of financial services.
Sellers of products such as private disability insurance and long-term care insurance (LTCI) depend on the existence of people who have enough money to pay insurance premiums, and to look like good risks, but not enough to be able to self-insure.
