Quote Originally Posted by BlackPeter View Post
Are you saying that it might not be a good idea to invest into insurance companies who underwrite life insurance policies for turkeys without excluding the risk of intentional cultural mass-killings of said turkeys?

I absolutely agree.

However - looking at the larger picture of insurance companies do I think that your post just highlights the problem of insufficient diversification combined with underestimating the likelihood and damage of one particular insured event.

I don't think that the insurance business is that much different to the finance business - and we both are quite heavily invested into some examples of the latter kind. The trick is in both industries to properly manage and cost risk - and to diversify sufficiently to make sure that one (or a series of) super accident(s) does not kill the business.

I probably need to do still some more research on CBL (and this is stuff for a different thread), but I don't see any reason why insurance in general should be more risky or less profitable than any other well managed business in the financial world.

Do you?
Read the history of Lloyds.
9/11 I only sold one share and it was Tower.
You are right about finance companies.I think Banks in Australasia have better government controls on them now,but the wild west days of finance companies is exactly what insurances companies are like.
We still have to watch bad loans with HBL and TNR.Both currently have few.
I think back to Re-Insure in Aussie,years of great profits,holding mainly cash.Went broke.AMI in NZ,a great history of profits.One earthquake broke them. CBL just remember those who do not follow history are doomed to repeat it.Be careful.If you can understand insurance compay's accounting you are doing well.If you can't,don't buy something you don't understand.