Insurance out. Macaroni in.

Dow Jones & Co. announced that insurer American International Group (AIG) will be replaced on the Dow Jones Industrial Average beginning September 22, 2008. The replacement component will be Kraft Foods, Inc. This comes a day after AIG announced the election of former Allstate chairman Edward M. Liddy to Chairman and Chief Executive Officer of AIG to replace Robert B. Willumstad.

This will leave the Dow Industrial without an insurance component, although the banks and financial institutions in the average have insurance interests.

So, where is the good news for business insurance?

There really is none. So, let's focus on Kraft today. I got through college on Kraft. Macaroni and cheese and a can of tuna was staple food for my room mate and I. I love Kraft foods. My youngest daughter would live on Mac and Cheese if I allowed it. From the Kraft website:

"Kraft is a billion-dollar brand that spans the globe with many different products. Consumers love Kraft peanut butter in Australia, Canada and New Zealand. Kraft ketchup is popular in Italy and Germany. Kraft Singles are always a hit in Hong Kong, Indonesia, Mexico, the Middle East, Puerto Rico and the United Kingdom. People use Kraft dressings and mayonnaise in Denmark, Germany, the United States and Venezuela. And, in North America, Kraft macaroni and cheese (or Kraft Dinner as it’s called in Canada) is a must-have in many family kitchens."

The Chairman is Irene Rosenfeld and the company just increased dividends. Her introduction on the Kraft website is pretty nifty and makes me hungry. The company makes Oreos, Tang, and A-1 Steak Sauce!

But, back to business insurance. When looking for an insurer you want price, stability, and service. In recent days, insurer stability has been shaken. You want an insurer that invests premiums in quality, stable investments so the insurer can fulfill its promise to your business if it has a claim.

Berkshire Hathaway is a holding company with many familiar insurers such as Geico and United States Liability Insurance Group. As of December 2007, according to the Kraft fact sheet, the top institutional investor in Kraft was... Berkshire Hathaway with 8.6%. Not very exciting -- just macaroni and cheese. Strong and stable (or staple?) mac and cheese._{(Photo © Karl Baron with permission.)}