Savers Property And Casualty Insurance Co

Twist and shout... and cry

On Wednesday of last week, the Federal Open Market Committee (FOMC) announced that it would attempt to aid the US economy by extending the duration of its portfolio, effectively performing what the market has dubbed “Operation Twist” (OT). Quoting from the Fed's announcement: “The committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of six years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of three years or less.”

This $400 billion is a substantial sum as it actually represents about a quarter of the volume of Treasuries held by the Federal Reserve Bank.

It also intends to impact the long-end of the yield curve by driving longer term rates even lower. The Fed did not announce another round of what is called quantitative easing; they are essentially not expanding their balance sheet at this point.The market did not reference the Fed to be "significant" risks reducing the size of the economy due to problems in "financial markets", essentially recognizing the terrible problems in Europe.

So what effect this may have in general and, more importantly, on Bermuda? I think it is important to consider three aspects:

Housing market 1). A major intent of lowering the longer end of the yield curve and long-term rates is to help support the housing market. That, in my opinion will not be very effective. Firstly, it is unlikely that 30-year mortgage rates which are already extremely low in the US will fall substantially because at some point risk needs to be priced. The lender needs to make money so they are unlikely to continue to drop rates in lock-step with Treasury yields. This is also true in Bermuda. Bermuda mortgages are not US mortgages.

PIA National Names Edward J. Fernandez 2011 Company ...

WASHINGTON, Sept. 30, 2011 -- /PRNewswire-USNewswire/ -- The National Association of Professional Insurance Agents (PIA) has named Edward J. Fernandez as its 2011 Company Representative of the Year. Mr. Fernandez is president of the Palisades Companies, part of the Plymouth Rock Assurance of New Jersey family. The award was presented September 24, 2011, during a ceremony in San Francisco held in conjunction with a national PIA board of directors meeting.

"Throughout his career, Ed has always been an outspoken advocate for professional, independent insurance agents," said Andrew J. Harris, vice president/treasurer of PIA National, who presented the award. "He has implemented programs to assist agents and make sure they are full partners in the decisions he makes. There is no one more committed to achieving a sound working relationship between insurance agents than Ed Fernandez."

Fernandez has 35 years of experience in the property/casualty insurance industry.  Prior to Plymouth Rock he was with Chubb Insurance for almost 20 years, during which time he held management positions in marketing, personal lines, and branch management. His most recent position was managing director and chief field officer for Chubb Personal Insurance. He developed a strong track record for profitable growth and innovation, and a reputation as a strong supporter of the independent agency system.

The criteria used to select the PIA National Company Representative of the Year includes professional experience, assistance given to agents, technical knowledge and demonstrated awareness of industry problems and market conditions. Their contributions to the industry through participation in PIA and other insurance organizations are also considered, as are their contributions to serving the public and their community.

"Since the company's beginnings in 1992, we have remained dedicated to our independent agents," said Fernandez. "Independent agents, like consumers, have many options when it comes to insurance carriers and the relationship we have with them is the foundation of our success. It's my pleasure to accept this recognition on their behalf.

Pride and prejudice, a novel in three volumes

Romeo and Juliet

Crime and punishment

War and Peace

And Then There Were None