Insurance Companiesgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
This is more of a statement, rather than a question. I note that some large Insurance Companies have long ago known about Y2K issues. They encountered problems with some of their long term annuities (30 - 40 years) and realized they had a problem.
Insurers might be affected like banks. They might also be the "dominoes" of financial problems in that they might have to pay out large sums to settle claims for Y2K interruptions or catastrophic events caused by such interruptions. (This is apart from litigation costs.) If there were a sudden influx of claims (assuming the insurers themselves were still able to operate and able to escape their own internal Y2K computer or embedded systems problems), the Insurance Companies will need to raise cash quickly to make payouts. To do this, the insurers will probably start selling off their investments, such as bonds and high quality stocks. This could cause disruption in the financial markets.
Such a scenario has already been theorized for a very large natural catastrophe (like an 8.0 earthquake in the San Francisco Bay Area, or Hurricane Andrew hitting Miami or New Orleans in their entirety).
If there are any insurance folks around, I'd be interested in your additional comments on this subject.
-- Ken Johnson (firstname.lastname@example.org), May 13, 1998
Silence since May, 1998?
-- Robert A. Cook, P.E. (email@example.com), September 01, 1998.