I would personally not buy any insurance from this company controlled by Apollo

[LongHaul]

https://www.forbes.com/sites/antoinegara/2018/02/01/apollo-and-blackstone-pick-insurance-as-their-next-bet-to-disrupt-wall-street/#1ae3de057689

 

This Apollo controlled insurance company sells annuities etc.  I think of most private equity firms are at the opposite end of the character spectrum as Buffett (especially Apollo) so I personally would not entertain buying any insurance from PE firms. 

 

 

I edited for clarity

[rb]

Maybe I don't understand your point. But I would totally buy insurance from Buffett. Actually I'm working on a venture right now and one of the things we're trying to solve is how do we buy insurance from Berkshire Hathaway.

[LongHaul]

I edited to try to make my point clearer.  Berkshire has a very high credit rating and their companies generally try to do the right thing so great to buy insurance from them.

 

On the opposite side of the spectrum I think a lot of PE firms are interested in maximizing short term value any way they can and 1. They may not be around for the long pull and 2.  They may try to weasel out of paying you.

[cameronfen]

My dad works in insurance and even though the CEO of athene is very famous, among actuaries etc he is known as a cowboy and takes inordinate risks to get his returns.  He succeeded in the past, maybe he is misunderstood by acturies, or maybe he got lucky. 

[LongHaul]

That is really interesting cameron.  Is he known as a cowboy on the asset side or liability side or both?

[cameronfen]

That is really interesting cameron.  Is he known as a cowboy on the asset side or liability side or both?

 

I can only repeat what I heard second hand but its basically it's on the asset side.  Partially it's doing what WEB have been doing, basically selling insurance to generate capital for mutual funds, but with the balance sheet and leverage that resembles an insurance company rather than a company like Berkshire that can withstand losses.  Granted, when I heard this I thought well greenlight and third point have there own insurance businesses too, which may be a way of saying the traditional insurance is skeptical of maybe good innovation.  At the same time, I think I remember my dad talking about this guy trying to make money by aggressively pursuing a carried interest trade, I dont remember the context, but I think it's likely (havent done research) that he's doing the same thing now with MSRs (mortgage servicing rights), instead of selling more insurance to buy MSRs (which admittidedly were a great deal), I think athene borrowed a lot of money so they could buy more.  This is no longer insurance but risky carried interest trade.  Even though rates were low when you bought, what happens if rates collapse, and people refinance a mortgage and you lose both the MSR and have to pay back a loan that was made at higher interest rates.  Granted they did these deals at historic low rates, but as a buyer of insurance, you dont participate in any of the upside, you just want to get your money when you need it. 

[LongHaul]

Interesting. thx.