Fighting Poverty --A Campaign by James Ingram

AIG’s Risk From Storms Rises After Life Divestitures

noreply@blogger.com (James A) — Mon, 29 Mar 2010 18:10:00 +0000

AIG’s Risk From Storms Rises After Life Divestitures (Update1)
March 29, 2010, 11:36 AM EDT
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By Hugh Son

March 29 (Bloomberg) -- American International Group Inc., the insurer that stayed profitable through the Sept. 11 attacks and Hurricane Katrina, may be more exposed to disasters after divesting life insurance units to repay its government bailout.

AIG will be a “smaller and more focused company” after selling American Life Insurance Co. and AIA Group Ltd., divisions that produced more than a third of the firm’s insurance revenue last year, Chief Executive Officer Robert Benmosche told shareholders this month. Catastrophe losses have the potential to drain AIG’s government bailout funds, the New York-based firm said in a February regulatory filing.

Former CEO Maurice “Hank” Greenberg built AIG into the world’s largest insurer by using earnings from life units, plane-leasing and consumer finance to balance volatile revenue and claims costs from property-casualty operations. AIG had to sell businesses to help repay the 2008 government rescue needed after losses tied to home loans.

“They definitely will be affected by storms in the future,” said Terry Leone, senior insurance analyst at SNL Financial in New York. “Their overall business will be more tied to the property-casualty cycle than it was in the past.”

AIG’s diversity allowed it to post profits after the worst terrorist attack and costliest natural disaster in U.S. history. The insurer recorded net income of $327 million in the third quarter of 2001 even as the strike on the World Trade Center cost the company $820 million. Warren Buffett’s Berkshire Hathaway Inc. had a net loss of $679 million that quarter.

Hurricane Katrina

AIG had $1.57 billion in catastrophe costs in the third quarter of 2005, when Katrina hit the U.S. Gulf Coast. Still, AIG had net income of about $1.7 billion that quarter. Allstate Corp., the Northbrook, Illinois-based home and auto insurer, lost $1.55 billion in the same span.

Forecasters at Colorado State University and AccuWeather Inc. have said the Atlantic hurricane season, which begins June 1, will result in more storms than average. Already this year, more than 20 insurers and reinsurers have reported losses of as much as $4.1 billion from the windstorm that struck Western Europe last month and the earthquake in Chile, the fifth- strongest in a century. AIG has yet to report the costs of those catastrophes.

Benmosche, AIG’s fourth CEO since Greenberg left in 2005, is selling businesses to repay loans within the firm’s $182.3 billion bailout. Ratings firm A.M. Best is evaluating if the sales of AIA and Alico will reduce AIG’s ability to service its debt, analyst Jennifer Marshall said in a March 3 research note.

Global Profits

AIG got about $22.8 billion in premiums and fees last year from selling life insurance and retirement products outside the U.S., where AIA and Alico operate. That compares with $5.3 billion from U.S. life units, which Benmosche has said AIG will keep, and $32.2 billion from global property casualty sales.

The life units were “a material provider of earnings to AIG historically,” Marshall said. The declining price of commercial coverage “will continue to challenge profitability at the company’s core property-casualty operating subsidiaries” as AIG competes for market share.

U.S. commercial insurance rates fell 5.6 percent in the fourth quarter, according to a survey by the Washington-based Council of Insurance Agents and Brokers. Prices have dropped industrywide in every quarter since 2004 and AIG has said it expects the decline to continue this year. Sales growth in 2010 will be driven by increases outside the U.S., the insurer said.

Prudential, MetLife

“The fact that property casualty and life insurance sales aren’t correlated was important for AIG,” said Clark Troy, a senior analyst based in Chapel Hill, North Carolina, for Aite Group, a research firm. “I’d be very surprised if AIG diversified out of life altogether.”

The insurer secured deals to sell the two insurers to Prudential Plc and MetLife Inc. for a combined $51 billion. The sales will be completed by year-end, the companies have said. Christina Pretto, an AIG spokeswoman, declined to comment.

AIG also completed the sale of its PineBridge Investments fund manager to Pacific Century Group today, the insurer said in a statement. Hong Kong billionaire Richard Li’s Pacific Century agreed in September to pay about $500 million for the subsidiary, which operates in about 30 countries and managed $87.3 billion as of year-end.

Property-Casualty Reserves

AIG set aside more reserves for casualty claims last year, a move that contributed to a $2.3 billion fourth-quarter charge. Fitch Ratings said last month that the charge to cover claims from policies sold in prior years caused concerns about the “reserve adequacy and underlying profitability” of AIG’s property-casualty operations.

The company also drew $2.2 billion in the first quarter from a U.S. Treasury Department facility to bolster property- casualty units. AIG used the cash to redeem securities held by insurance subsidiaries, improving liquidity and a measure of capital adequacy watched by rating firms and regulators.

AIG’s property-casualty operations, rebranded Chartis Inc. last year to distance the division from AIG, sell coverage for property, worker’s compensation, corporate boards and ships and airplanes. Chartis operates in more than 160 countries and jurisdictions, and gets more than 40 percent of sales from outside the U.S.

AIG needed a U.S. rescue in September 2008 after soured derivative bets tied to housing markets drained cash. The company’s government assistance includes a $60 billion Federal Reserve credit line, up to $52.5 billion to buy mortgage-backed securities owned or backed by the insurer, and a Treasury investment of as much as $69.8 billion.

NFL awards 2013 Super Bowl to New Orleans

noreply@blogger.com (James A) — Wed, 20 May 2009 02:28:00 +0000

NFL awards 2013 Super Bowl to New Orleans
Big Easy beats out Miami and Glendale, Ariz., gets title game for 10th time
The Associated Press
updated 6:00 p.m. ET, Tues., May 19, 2009
FORT LAUDERDALE, Fla. - A few blocks from the notorious 17th Street Canal levee breach, where overgrown lots and gutted homes remain easy to find, a pregnant woman walked two dogs up the driveway of a newly renovated house.

Twenty-five-year-old Brynn Strahan widened here eyes and smiled broadly as she considered the Super Bowl’s return to New Orleans, where it was played regularly when she was a child.

The NFL’s marquee event seemed unlikely to return any time soon — if ever — after Hurricane Katrina. Yet on Tuesday, a little less than four years after catastrophe struck — and two months after Strahan and her husband moved into their rebuilt, beige brick home — NFL owners voted to bring their biggest game back to New Orleans in 2013.

New Orleans beat out Miami, which sought a record 11th Super Bowl, and 2008 host Glendale, Ariz. This is the 10th time New Orleans will be the Super Bowl site.

“Granted, there are (abandoned) houses here and there, but everything’s coming back,” Strahan, eight months pregnant, said of her Lakeview neighborhood. “Everything’s being rebuilt around me. I’m optimistic. I never want to leave.”

Strahan’s enthusiasm paled in comparison to the way those who work in the city’s leading industry — tourism — took the news.

“It’s been a long road back and we feel like this is sort of a final validation that the capacity of the New Orleans’ tourism industry is 100 percent back, because we just landed the biggest event there is,” said Stephen Perry, president of the New Orleans Metropolitan Convention and Visitor’s Bureau.

Perry traveled to Fort Lauderdale, Fla., for the NFL meetings this week so he could assist with what amounts to a $12 million bid to host what will be the city’s 10th Super Bowl, and the seventh in the 34-year-old Louisiana Superdome.

The dome — torn open by Katrina, damaged by rain, infested with mold and soiled by raw sewage when thousands of evacuees were left sweltering in the rancid air there for days after the storm — has undergone more than $200 million in repairs and renovations.

It has been sold out for NFL football ever since the Saints returned in September of 2006. It also has hosted three Sugar Bowls and a BCS championship game. The stadium is due an additional $85 million in renovations under an agreement between Gov. Bobby Jindal and Saints owner Tom Benson, which will also extend the Saints’ use of the building through 2025.

The unprecedented deal, which involves Benson buying an abandoned downtown office tower and leasing office space back to the state, still requires state Legislative approval but has met minimal resistance so far.

“This shows that our city is on the rise, viable and thriving, and I have great faith in what we can accomplish,” Benson said after the Super Bowl vote.

Challenges remain in New Orleans. Work is ongoing to strengthen a repaired levee system, which failed when Katrina flooded 80 percent of New Orleans. Blight remains prevalent in some of the worst-flooded or poorest neighborhoods. Police have struggled to get violent crime caused by warring drug gangs under control.

At the same time, much of New Orleans’ historic character remains. Renowned restaurants that people have loved for generations are open all across town, serving refined staples like Creole gumbo, soft-shell crab and shrimp remoulade.

Mardi Gras and major music festivals attract huge crowds again. Both the Saints and NBA’s Hornets have been back full-time for multiple seasons. The city has already hosted college football’s national championship and an NBA All-Star game since the storm. The NCAA men’s basketball Final Four — the fifth to be played in the Superdome since Michael Jordan led North Carolina to a title there in 1982 — is slated for New Orleans in 2012.

“We’re finally getting our step back in the city and it’s taken a lot of hard work, a lot of people’s effort and this (will be) a wonderful boost to us, needless to say what it would do for our economy,” said celebrity chef Emeril Lagasse, who has three restaurants in the city.

In Algiers Point, a riverfront neighborhood of historic, brightly colored shotgun houses adorned with Victorian detail, cafe owner Hillery Moise said she’d been on “pins and needles” waiting for the Super Bowl announcement.

“It matters because people need to come to New Orleans and see how much we are back,” she said. “They will understand why in a few short years people have come back and rebuilt — the resilience of the people, which is mainly because of their love for the city and the people in it.”

Across town in suburban Metairie, former longtime Saints kicker Morten Andersen, who happened to be in town for his election to the New Orleans Saints Hall of Fame, asserted that the NFL “had to” bring the Super Bowl back the city where he spent “the greatest 13 years of my life.”

“No matter what’s thrown at this city, people still have a smile on their face and a sense of humor and to me there’s no other place in the world that would handle situations the way people in New Orleans do,” said Andersen, a native of Denmark who came to America for college and kicked in the NFL for 25 seasons. “Their ’joie de vivre,’ their love of life is so evident in everything here, whether it’s food, music, culture — football, which is part of the culture.

“Everything’s done with passion here. I think that’s maybe what other cities in America are missing that they could learn from New Orleans, is the way to live.

Report: Post-Katrina levees not strong enough

noreply@blogger.com (James A) — Sat, 25 Apr 2009 16:38:00 +0000

http://www.msnbc.msn.com/id/30391989/

Experts also recommend elevating more homes, abandoning neighborhoods
The Associated Press
updated 6:37 p.m. ET, Fri., April 24, 2009
NEW ORLEANS - New Orleans should increase the strength of new levees being built to protect against catastrophic hurricanes, elevate more houses and abandon neighborhoods that rest below sea level, an independent research panel said Friday.

Levees under construction by the Army Corps of Engineers aren't being built to a high-enough flood protection standard, said the report by the National Academy of Engineering and the National Research Council.

The independent panel of experts was asked by the federal government to review the corps' investigation of levee failures during Hurricane Katrina and its work to avoid such a catastrophe again. The corps is spending about $14 billion to raise levees and build floodgates able to withstand a "100-year" storm, or a moderately dangerous hurricane with a 1-in-100 chance of hitting any given year. The corps plans to finish by 2011.

"For heavily populated urban areas, where the failure of protective structures would be catastrophic — such as New Orleans — this standard is inadequate," the report said.

Instead, New Orleans should be protected by a "500-year or maybe 1,000-year protection," the type of engineering standards used in earthquake zones or along major rivers, said Richard Luettich Jr., the director of the Institute of Marine Sciences at the University of North Carolina and a member of the committee.

Living with risk
Friday's report was the final review of work done by a team of engineers hired by the corps to investigate levee failures and develop solutions. The leader of that team, which is called the Interagency Performance Evaluation Task Force, said the levee system being built by the corps was a good starting point.

"The current system being built is a very good baseline," said Ed Link, a civil engineer with the University of Maryland who led IPET. "It has a lot of resilience built into it, so the potential for catastrophic loss is much less."

The corps is considering construction of a system that would offer protection against a 500-year storm, but its studies are still in their early phases.

Friday's report also said the city should discourage people from moving into areas vulnerable to storm-surge flooding, in particular those that are below sea-level.

"If there is one thing we've all learned from this, living in New Orleans entails risk," Luettich said. "Smart decisions have to be made about where people live."

The issue of whether to abandon certain areas has come up several times as the city's continued rebuilding and has drawn sharp responses, particularly from those who believe they should be allowed to rebuild where they'd lived before the storm. Mayor Ray Nagin has said the government shouldn't dictate where people can live.

LaToya Cantrell, president of the Broadmoor Improvement Association, said she generally agrees with the report but rejects any suggestion that areas below sea level should be avoided.

Lawsuit settled
Meanwhile, a Virginia company has agreed to pay $4 million to settle claims it breached a contract to set up a base camp for relief workers in Louisiana after Hurricane Katrina, the Justice Department announced.

Lighthouse Disaster Relief and two of its partners, Gary Heldreth and Kerry Farmer, were accused of billing the Federal Emergency Management Agency for work they never performed after the August 2005 storm.

The settlement resolves a civil lawsuit that accused the contractor of violating the False Claims Act.

The government said the contractor agreed to shelter and feed 1,000 relief workers in St. Bernard Parish, but the camp never supported more than 400 people.

More on: Hurricane Katrina | FEMA

Reflections on New Orleans.....A Call to Service

noreply@blogger.com (James A) — Sun, 25 Jan 2009 07:45:00 +0000

Before summarizing my recent volunteer experience in New Orleans, fate would have it that i would have an opportunity to listen to Rev. Dr. Howard-John Wesley, our new pastor in late December. Reverend Wesley and his family recently returned from a week-long trip to Johannesburg, South Africa and used the sermon before Xmas to summarize their experience. Dr. Wesley was amazed at the spirit of the South African residents, despite the fact that many were impoverished, jobless, suffering from starvation or some form of disease. They continue to believe vehemently in God's "will" and appreciate the blessings of life and though many are without, as he stated, the "glamour and glitz," they remain deeply thankful for what they have. After his voyage to the great continent, Dr. Wesley suggested that when you travel to an area like South Africa, where more than 40% of citizens are living below the poverty line, you come to understand what the word poverty truly means. You begin to appreciate what you have even more -- in fact, he stated, "what makes the miracle of God noteworthy is the normality of the miracle, not the glamour" -- miracles such as food and shelter; employment; waking up everyday and being disease-free.

I found a lot of similarities in Dr. Wesley's trip and my recent volunteer experience in New Orleans. In the work and subsequent interviews and conversations with residents affected by Hurricane Katrina, I found that many were poor in terms of finances, but rich in spirituality and love. Their hope may have diminished by the practical experiences of life, but recognizing and appreciating God's blessings allowed them to open up their hearts and homes (and in some instances, barber shops) to talk candidly with me about their experience pre and post Hurricane Katrina.

The Volunteer Experience

Having previously volunteered for Habitat for Humanity in the Lower 9th Ward of New Orleans, I decided to work with another organization, which offered a more direct and instant impact on citizens affected by Katrina. Green Light New Orleans is an organization that replaces light bulbs with energy efficient bulbs in the homes of low and fixed income residents. Since its formation in 2006, Green Light New Orleans has installed over 125,000 CFL light bulbs saving the community 5.5 million dollars and relieving the planet of 55 million pounds of CO2. Given a bike, map and a bag filled with CFL light bulbs, appointments were scheduled for me throughout Wards 9 and 17, two of the hardest hit areas in New Orleans. The first day of appointments were in Ward 17 and allowed me to meet Mrs. Rosemary Hunter, a senior citizen who requested 30 light bulbs for her house. Mrs. Hunter moved to Lakeland, Florida before the hurricane and recently moved back, only to have her husband suffer a major stroke 5 months upon their return. Though Mrs. Hunter and her family have suffered major losses, she found a way to appreciate the small gift of an Obama/Biden button I was wearing. Since my trip, we've managed to keep in touch and i've found that writing and calling brightens her day despite the constant reminder of struggle. Between my Ward 17 assignments, i also took time to visit a local barber shop, where i met Jerard a.k.a. Sole, who was very vocal in expressing his frustrations on the state of New Orleans, more specifically the predominantly African American communities, which have been left without vital resources and any trace of recovery. One quote from Jerard that has remained with me is when he stated: “What else can be done to me that hasn’t already been done? Look around you man – there is nothing here and it seems as if no one is trying to do anything about it.” The following day, appointments were scheduled in Ward 9, the hardest hit and an area that remains tremendously deprived economically. One of the assignments took me to the Andrews' House, where i talked at length with Mr. Andrews a former national guardsman. He told a story of sending his family to Texas before the hurricane, while he stayed behind, ultimately facing several feet of water in his house and for days after, watching dead bodies float down the street, with snakes and alligators and all types of debris. I asked Mr. Andrews what made him stay back – and he referenced having emotional ties to his house and community and a stubbornness that prevented him from leaving the city he grew up.

The State of New Orleans Today

Less than 4 years later, devastation in these predominately African American Wards is very prevalent and severely unaddressed. Crime is at an all-time high and many residents remain displaced, unable to come back to the communities they called home. The Lower 9th Ward has had little investment made in it despite being the most damaged by Katrina. Prior to Katrina, it was full of homes, churches, children playing, and families, but now is filled with vacant lots overgrown with weeds, or empty houses with missing doors, and broken or boarded windows located only yards away from FEMA trailers or the few occupied homes which have been renovated or rebuilt. Despite the substantive issues that afflict New Orleans and its citizens, I was amazed at the resolve many still continue to have. Hope may be immeasurable, but the inability to measure doesn’t preclude a number of residents from having it – not hope in a politician, or any of the levels of government that ultimately failed these citizens – but there is a determination that things will change because they cannot get any worse. And until things change for the better, these residents will continue to exude the spirituality and love that has allowed them to keep “hope” alive.

A Call to Service

Standing among the millions on the Washington Mall, Inauguration Day, I listened to President Obama deliver an empowering address which focused on a number of things, including a plea to give back to those less fortunate and to reinvest in our communities. Like many of you, that address reinforced my call to service and reinvigorated my desire to help address the issues in New Orleans and the broader issue of poverty.

Today I ask my friends and family to stand firm with me in helping address poverty by making a personal contribution to Green Light New Orleans. After speaking at length with the Executive Director, they are in need of financial contributions to help continue to provide energy efficient light bulbs to low and fixed income residents. Like anything in life, there is such a thing as being too successful –and Green Light’s program has been that. Currently, there are 3000 low income residents of New Orleans on the waiting list for these energy efficient bulbs, which will save thousands of dollars over the lifetime of the light bulb. As I plan to spend my upcoming March birthday in New Orleans doing volunteer work, what a great gift it would be to me if you could make a donation that I can take and present to the Executive Director on your behalf. I recognize these are tough economic times, but remember, even $5 donations put Barack Obama in the White House. If you are interested in learning more about Green Light New Orleans please visit: http://www.greenlightneworleans.org/. If you are interested in making a financial contribution, please mail a check payable to: Green Light New Orleans and mail to my address below by March 14, 2008. For those of you unable to contribute, I’m certain that you’ve been inspired to give back in other ways. I thank you all for your kind words and continued support.

James Ingram
32 8th Street NE Apt B
Washington, DC 20002

Campaign to Fight Poverty--The Trip

noreply@blogger.com (James A) — Sun, 21 Dec 2008 02:23:00 +0000

E-mail upon arrival to New Orleans
Thursday, November 20, 2008

Friends and Family:

Thanks to all of you who continue to support my efforts to address and help eradicate poverty. This evening, I traveled back to New Orleans, LA to do volunteer work in the Lower 9th Ward and other parts of the Hurricane-ravaged city. This trip is part of a larger, personal campaign to fight the issue of poverty – more specifically, the aim of this trip is to continue to build awareness (among family, friends, peers, etc) of the issues that remain prevalent in New Orleans post Hurricane Katrina – homelessness, starvation, joblessness, lack of healthcare and clean water. These issues continue to afflict many of the residents even years after the government hesitantly admitted its failure to respond in a timely manner. The struggles of these residents are even more personal to me because an inordinate amount of the afflicted citizens are African American.

Two years ago, in my first volunteer trip, my close friend Rod Garvin and I met Troy, a Lower 9th Ward Resident, who thanked us for hel ping rebuild his Ward. I never knew the conversation with him would serve as the impetus for me to continue to want to help rebuild New Orleans, and even more importantly do my part to help build an awareness of the unaddressed and neglected issues. Despite his personal gaffes, I commend Se nator John Edwards for making poverty and the rebuilding of New Orleans, the central theme of his presidential campaign. I’m optimistic that we can make progress on the national front to address poverty --the historic victory of Barack Obama has taught me that the unlikely remains possible, the improbable is not out of the question and the implausible is still achievable. I have HOPE that the universal issue of poverty and situations like New Orleans and the city in which I reside, Washington, DC, can be adequately addressed and ultimately eradicated.

1st Phase of Campaign to Fight Poverty:

Volunteering Quarterly in the Lower 9th Ward of New Orleans & Locally in Washington, DC;

Build Awareness of the Issues to Family, Friends and Peers ;

Seek Collaborations with Local Organizations Who are Addressing Poverty

I ask for your continued support, conversation and prayers that I can make a difference in the life of someone who needs assistance. I remain humbled by your kind words and look forw ard to updating you on the trip and hopeful progress.

James I.