General Electric insurance considered ‘risky’ by Fitch

Not enough money: A file picture showing an employee assembling a Leap jet engine at the GE Aviation assembly plant in Lafayette. Fitch said GE and many other insurers still have not set aside enough money to cover losses expected on long-term care policies. — Bloomberg

NEW YORK: General Electric Co ranks among the riskiest backers of long-term care insurance, suffering from both high exposure to claims and a relatively small cash pile to pay them, Fitch Ratings said in a report that sent GE’s shares tumbling.

The Fitch report, which the credit rating agency produces annually, echoed concerns raised last week by financial investigator Harry Markopolos, who estimated that GE has under-reserved by US$29bil for its long-term care policies.