Bidding Against The Giants That Have Taxpayer Backing Part II

One of the interesting things that I have noticed about the current insurance market is any of the financial institutions or insurance companies that received any part of the bailouts have become much more competitive, almost too competitive. 

I am talking about financial institutions or banks as they have offshoot companies that are my company's direct competitors.   We used to be able to underbid the large companies on Workers Compensation projects by sometimes up to 70% due to our much lower overhead expenses.  Ever since the bailouts started,  these companies have been able to bid much lower on projects than early in 2008.  

There are two concerns with this development.  One is that the bailout of insurance companies and financial institutions have distorted the insurance markets, including Workers Compensation. The second is that small businesses will now have a much tougher time competing against the larger companies with their marketing machines and now loads of cash to prop up their lower bids just to get the business. 

Have the bailouts harmed the insurance markets?  As I mentioned in my last post,  the GAO is investigating the AIG  bailouts to see if there was an effect of distorting the markets.  From what I have seen, this is a forgone conclusion.