This is the final episode of our series with Tom Gober.
Last episode ended with Tom challenging the offshore reinsurers to show us the $1.5 trillion, and in Episode 4, he shows you which companies are behind it.
Just 40 companies account for 85% of it, and the biggest sends $235.7 billion to a single offshore affiliate while holding only $4 billion of surplus, which Tom describes as moving money from one pocket to another, like "trust me, bro, I got this."
Here's what we're going over in Episode 4 "The Offshore Black Box":
* Tom maps every internal reinsurance deal at a household name in American insurance, with billions swirling between its own companies and all of it tapping into 7 captives in Arizona where you can't get any information.
* Tom shows how a company you'd recognize asked Texas to approve a reinsurance deal worth more than $20 billion with its own affiliate, and when it never heard back, it disclosed the deal as "non-disallowed."
* Tom ranks the 25 carriers he worries about most, and at the top of the list, just over 1% of the higher-risk assets going bad would wipe out the entire surplus.
* Tom shows that over the last 9 years, the industry's surplus grew by about 50% while the affiliated reinsurance he's worried about doubled.
We also call out 9 state insurance commissioners by name, so stay for that.
I'm very bearish on private equity and private credit, and this episode made me even more so. Insurance companies have been a huge source of money for those firms, and a lot of that paper ended up in 401(k)s and pension plans, so a firefighter in Peoria who's never thought about private credit may already own it.
Over 4 episodes, Tom has taken us from a recorder hidden in a briefcase to a $1.5 trillion question the regulators still haven't answered, and neither of us got paid a cent to do it. We did it because the people who've paid their premiums on time for years deserve to know where their money went.
I'm asking every American who watches this to speak up, and the easiest place to start is sending this series to anyone you know with a life insurance policy or an annuity.
Tom's closing words say it all:
The more people who hear the truth, the better off the policyholders will be.
