The GAO has issued a report examining the effects of the financial crisis of 2007-2008 on the insurance industry, finding that the negative effects of the crisis were quite concentrated, hitting primarily AIG and a number of other insurers involved in financial insurance or the mortgage market. The report addressed the following issues:
- What is known about how the financial crisis affected the insurance industry,
- The factors that affected the impact of the crisis on the insurers and policyholders,
- The types of actions that have been taken since the crisis to help prevent or mitigate potential negative effects of future economic downturns.
The report found that the crisis had a generally minor effect on policyholders, but some mortgage and financial guaranty policyholders – banks and other commercial entities – received partial claims or faced decreased availability of coverages. Additionally, the report found that insurance business practices, regulatory restrictions, and a low interest-rate environment helped reduce the effects of the crisis.