Fitch calls General Electric insurance risky, shares sour again


by   |  VIEW 804
Fitch calls General Electric insurance risky, shares sour again

On Tuesday, the 20th of August 2019, NY-based global rating agency, Fitch Ratings, widely contemplated as one of the big three credit rating agencies, said that the US-based multinational conglomerate, General Electric Co.

was ranked among the riskiest brewers of long-term care insurances, adding that the company primarily engaged in energy and utility had been languishing lavishly from a higher exposure to claims alongside a relatively small amount in its shelves to pay them off.

In point of fact, Tuesday’s (August 16th) Fitch Ratings report came forth a few days after Madoff-whistleblower, Harry Markopolos, a financial forensic expert who turned down Madoff’s ‘Ponzi’ scheme, had revealed that General Electric would likely to fall short of its $29 billion long-term care policies, adding that GE debt to equity ratio should be counted as 1:17 instead 1:3, which eventually prompted a calamitous market sell-off of GE’s shares.

General Electric’s share fell as much as 15 percent on last Thursday (August 13th) after Markopolos had been quoted saying that GE had been concealing critical data related to its debt to equity ratio alongside counts on its Baker Hughes.

Following release of Fitch report on Tuesday (August 20th), share of General electric pummeled 3.34 percent to wrap up the session at $8.38 a share. Meanwhile, GE Chief Executive, Larry Culp, who had been scuffling to grapple with a debt-pile of $105 billion and selling GE assets in order to pay off its debts, defended against Markopolos findings saying, “Our current reserves are well-supported for our long-term care portfolio characteristics”.