Insurer Travelers has rejected the idea of being added to the government’s bailout list. The Treasury Department last week hinted it might extend the $700 billion financial rescue package to the insurance industry.
In a letter to Treasury Secretary Henry Paulson, Travelers Chairman and CEO Jay Fishman says the insurer, which has its property casualty lines based in Hartford, continues to generate attractive returns through stock repurchases and dividends over the past 12 months. He also says Travelers liquidity currently stands at twice its target level.
Fishman says he understands the substantial majority of insurance companies also feel it’s unnecessary for the government to bail them out, although some life insurance companies may be in more difficult circumstances. For those, he advocates seeking a private market solution, rather than government dollars.
So far, the bailout package has been extended to banks, but the government says it is reviewing the need for action in the insurance, hedge fund and auto industries. Travelers last week reported third quarter profits down more than 80%, largely because of hurricane related claims.