Insurance

Hurricane Milton blows utilities into eye of storm

10 Oct 2024

The industry’s stocks have led the market thanks to prospects for AI-related electricity usage and lower interest rates. Such exuberance misses the inconvenient truth about mounting climate-related costs. Florida’s $170 bln NextEra epitomizes the tricky investment theses.

AIA loosens tight Chinese purse strings

22 Aug 2024

The $70 bln insurer reported a 25% increase in new business value in the first half, led by rapid growth in mainland China. Demand for the group's savings products is driving sales as the economy sputters. AIA's aggressive expansion onshore is paying off.

BNP’s AXA deal is a logical use of spare cash

2 Aug 2024

The French bank will buy the insurer’s fund unit for 5.1 bln euros, using money from its BancWest sale. It’s a big deal, but the price looks fair. And while BNP Paribas investors may prefer buybacks, a capital-light target makes more sense than a rash swoop on another lender.

Scor investors’ bad year can still get worse

16 Jul 2024

The French insurer’s shares fell 25% on Tuesday due to troubles in its life arm. Scor’s investors could have sold to rival Covéa six years ago, at twice the current valuation. If the looming hurricane season leads to big losses in 2024, they may be obliged to pump in new equity.

Pru’s buyback falls way short of a comeback

25 Jun 2024

The insurer’s shares jumped 7% on its plan to repurchase $2 bln-worth of stock. But its valuation still lags nearest peer AIA. To close the gap boss Anil Wadhwani has to show he can deliver both his predecessor’s overhaul and his own revamp. That's likely to be a long slog.

Nordic $5 bln insurer M&A limits cross-border risk

17 Jun 2024

Finland’s $21 bln Sampo is buying Danish rival Topdanmark. Overseas deals can easily go awry, but Sampo is buying a group it already half-owns and paying in shares. More importantly, the target’s current valuation should make it possible for synergies to cover the premium.

Suburban sprawl gives insurers the blues

7 Jun 2024

Losses from natural disasters are rising and have exceeded $100 bln for four years in a row. Climate change has made losses from hurricanes grow. But the bigger risk for insurers is severe storms hitting rapidly expanding cities in the sunbelt, like Dallas-Fort Worth.

JAB’s Buffett impression is a work in progress

22 May 2024

The private European conglomerate, whose $50 bln portfolio includes Pret A Manger and Panera Bread, hired an executive for an insurance push. It makes sense as a funding source, as investors from Warren Buffett to KKR and Apollo proved. The snag is JAB’s patchy investment record.

Hurricanes threaten to stir perfect economic storm

1 May 2024

Warmer oceans portend an unusually fierce 2024 season in the Atlantic, with two states already propping up their home insurance systems. The nightmare scenario is $200 bln of losses. Insolvencies would be a problem, but not as big as exorbitant premiums and lower property values.

Ping An and Vanke look made for each other

26 Mar 2024

Pressure is mounting on China's financial giants, including the $90 bln insurer, to support the beleaguered property developer. That is a big ask for Ping An, whose own earnings just slumped 23%. Still, helping Vanke could limit the pain for its own hefty property exposure.

British M&A refuseniks are playing a risky game

25 Mar 2024

Insurer Direct Line and retailer Currys both rebuffed offers that came with 40% premiums. One possible rationalisation is that a huge UK stock-market discount invites cheeky bids that require knocking back. But certain British stocks may also not merit greater generosity.

Generali has some scope to think bigger on M&A

12 Mar 2024

Under CEO Philippe Donnet, the $38 bln insurer did smallish deals. Targeting big players like $16 bln Aviva, to shrink a gap with rivals, may require clashing top investors to back an equity hike. But Generali could also fund a large buy by running down its chunky capital buffer.

American healthcare is a perfect cyber-hostage

7 Mar 2024

A hack at the biggest processor of insurance claims snarled billions of dollars of payments to US hospitals. The healthcare system’s interdependent web of middlemen means none can be allowed to fail, making it an ever-more-obvious target for the growing onslaught of ransomware.

L&G is an insurer with a fossil fuel-style problem

6 Mar 2024

The $18 bln UK group has underperformed European rivals. New CEO António Simões at least has a booming business in taking on corporate pension schemes. But like Shell and BP’s oil fields these are a finite resource, necessitating a durable Plan B.

Healthcare’s $450 bln octopus becomes the kraken

28 Feb 2024

Trustbusters are probing UnitedHealth, which insures 53 mln patients and works with 10% of US doctors, while also managing pharmacy benefits and more. It’s hard to dispute the market power. Whether there’s abuse, and how to stop it without hurting consumers, is less obvious.

UK $4 bln insurance mash-up may yet motor

28 Feb 2024

Direct Line rejected a cash and share offer from its $8 bln Belgian rival Ageas. The target’s depressed share price suggests it has good reason to hold out for more. And synergies related to the two groups’ capital should give Ageas scope to hike its offer.

A $16 bln deal models buyouts’ modest comeback

28 Feb 2024

Private equity’s 2023 was a year to forget; 2024’s near-$100 bln of buyouts is a better start. The carve-out of Truist’s insurance unit shows banks willing to lend, finally, at a decent level. Crazy checks won’t return until rates fall again, but for LBO shops, it’s a start.

Capital Calls: Oil M&A

22 Feb 2024

Concise views on global finance: The $11 billion Williston Basin combination of Chord Energy and Enerplus lacks the wow factor of Exxon’s and Chevron’s mega-mergers, but there are sufficient savings to suggest more deals will be on the way.

Li’s escape from Hong Kong value trap looks tough

16 Feb 2024

Richard Li has pulled his plans to float Asian insurer FWD many times, forcing his backers to wait for an exit. M&A may now be on the table. Nabbing a $10 bln valuation in a mooted stake sale to global peers like Sun Life will be tricky, even if the business is performing well.

Aon’s $13 bln deal leaves it little room for error

20 Dec 2023

The US insurance broker’s purchase of rival NFP is a sensible bet on the market for selling financial products to mid-sized firms, at a not-so-sensible price. Aon argues growth will be rapid. Still, its wobbly acquisition history saddles it with a credibility deficit.