Gift giving has always been a way of expressing love and admiration — unless it's the Federal Government giving you billions of dollars to shore up the house of cards that is this country's current economy. Then it's a sign you've failed as a capitalist.

At times like these, most industries would happily snatch up a “gift.” But P&C insurers aren't like most industries, apparently. “We're doing just fine, thank you,” is essentially what the U.S. Treasury Department heard from insurance groups such as the American Insurance Association (AIA) and the National Association of Mutual Insurance Companies (NAMIC) when it floated the idea of including insurance companies under the $700 billion emergency economic stabilization package approved by Congress. The two associations together represent more than 1,700 P&C insurers.

“We have surveyed our board of directors, and the substantial majority of the insurers represented by AIA do not support the inclusion of P&C insurers in the Treasury's Capital Purchase Program,” said Evan Greenberg, chairman and CEO of ACE Group and chairman of the AIA. “If made available, they will not elect to participate. Those members believe that, as P&C insurance writers, they are well capitalized and well positioned to weather the current financial market crisis without the assistance of the CPP announced by the Treasury. As a result, the P&C insurers that are members of AIA strongly prefer to compete in the private market and the substantial majority will elect not to participate in the CPP.”

NAMIC's President and CEO Charles Chamness put it a bit more succinctly while simultaneously slipping in a bid to keep regulation a state-based issue. “[We] urge the Treasury to exclude P&C insurance companies from any program that would provide direct capital assistance to insurers, and to leave our solvent and effectively regulated segment of the financial services industry out of any new federal regulatory requirements,” he said.

It was a somewhat shocking reaction not because of its content, but rather for the circumstances that preceded it. Circumstances that caused financial branches of firms like AIG to gobble up $90 billion almost as soon as the money was made available, and made beggars out of General Motors. In seasonal terms, the P&C industry's “thanks but no thanks” response was as surprising as hearing a version of A Christmas Carol in which Tiny Tim not only tells Scrooge to keep his gifts but also that he's doing just fine on his own, thank you very much. It's a rare reversal of roles for insurers, who are typically cast as the coal miser, whether in lawsuits or when it comes to rate discussions with regulators, at least in the court of public opinion. And it's also something else: It's refreshing.

After all, these reactions came amidst an announcement that the industry paid almost $12 billion in catastrophe claims in the third quarter alone. Let's not forget about the stock market, either, which seems to know no bounds in terms of daily percentage drops. This is dramatically affecting insurers' anticipated reserves and investment gains. Despite all of this, though, most P&C insurance divisions believe wholeheartedly that government assistance is unnecessary. In a world currently teeming with bad news, it's reassuring to know our corner of the business world resisted temptation and realized that, like those who buy insurance, it pays to be prepared for a worst-case scenario.

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Thanks, But No Thanks

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