Insurance

Lloyds’ PPI tragicomedy has suitably shambolic end

31 Jul 2019

The UK bank set aside way more than expected for missold insurance compensation. Since 2011, Lloyds has consistently underestimated how much these payouts will be, and how long they will last. The claims will finally stop next month, but the hit to its credibility will linger.

Elliott’s Saga raid rests on insurance revival

17 Jul 2019

The activist has boarded the UK group which flogs cruises and cover to the over-50s. A breakup may rejuvenate shares which have halved since early April, but a turnaround depends on its biggest unit. At least the investor can steer the choice of CEO Lance Batchelor’s successor.

U.S. healthcare reform ideas are too single-minded

27 Jun 2019

Americans are dissatisfied with the only rich-world system that isn’t universal. Democratic presidential candidates and others tend to fixate on either nudging the status quo or so-called “Medicare for all.” Other nations actually offer more varied examples – all costing less.

Swiss Re takes out insurance on its own IPO

27 Jun 2019

The reinsurer is listing nearly 30% of its UK life arm. Of late, investors have backed Trainline’s IPO growth plan and been cooler on that of fellow UK listee Finablr. Swiss Re will hope that a discount to listed peer Phoenix and 9% yield is enough to get investors on side.

Goldman’s grab for silver pound is win-win

11 Jun 2019

The Wall Street giant’s Marcus retail bank is teaming up with Britain’s Saga, which specialises in products for over-50s. The odd bedfellows both benefit. Goldman taps wealthy baby boomers and the UK company gets commission while attracting much-needed customers.

Anbang’s Dutch cast-off hopes for third time lucky

10 Jun 2019

Apollo-backed Athora is paying the defunct Chinese group 2.5 bln euros for insurer Vivat, its third owner in five years. The sale spares the blushes of the Dutch regulator for approving the previous sale. The new Bermuda-based owner is not risk-free but looks relatively safer.

Allianz picks brave moment to double down on UK

31 May 2019

The German giant is forking out $1 bln to lift its exposure to British home, car and pet insurance. Bolting a Legal & General subsidiary onto an existing joint venture will boost scale. But fierce competition, looming regulation and a shaky economy make it hard to ramp up returns.

Generali’s M&A push defies nationalist reflex

22 May 2019

The insurer wants to buy MetLife’s eastern European assets for 2 bln euros, Bloomberg reports. That would strengthen its base outside Italy. Diversification offers investors better prospects than some large shareholders' obsession with keeping Generali in Italian hands.

Japan Post’s insurer returns with better packaging

9 Apr 2019

The postal operator is offloading $3.5 bln of Japan Post Insurance stock. It gives funds to a seller known for dubious M&A. Investors are offered a company at a cheaper valuation and in better health than when this fiddly privatisation process kicked off in 2015.

Multiple political bets birth $17 bln health deal

27 Mar 2019

Centene’s purchase of WellCare is a gamble on continued U.S. government support for care of the elderly just as the Trump administration is challenging Obamacare. It’s also a wager that regulators won’t stop the deal or force hefty divestitures. Scale makes that a reasonable bet.

Corona Capital: NYSE e-trading, Blue Apron bubbles

19 Mar 2020

Concise views on the pandemic’s corporate and financial fallout: Media and porn giveaways as astute corporate strategy; telephone companies merit a valuation bump as network traffic surges; and a South African motor fuel group hopes to raise $2 bln even as stock markets plunge.

Ping An offers up a glimpse of China’s bank reboot

18 Mar 2019

The insurance giant is preparing a $1 bln IPO for OneConnect, a startup offering tech support for mainland lenders, including fancy credit checks. Beijing wants banks to lend more to smaller, private firms, but few can handle the risk. It’s a dilemma that leaves a lucrative gap.

Insurers’ deathly jackpot may yet backfire

15 Mar 2019

A sixth of 2018 operating profit came from UK insurers tweaking their mortality assumptions. Ghoulishly, that’s because customers are dying sooner, meaning lower required pensions payments. The problem for investors is that this handy boost could easily go into reverse.

Ping An stock repurchase comes with Beijing twist

13 Mar 2019

China’s biggest insurer plans to buy up to $1.5 billion of its Shanghai shares. The company, which has a Hong Kong listing too, says it’s undervalued, but the deal also stems from official efforts to pep up mainland markets. Shareholders benefit, but policy winds blow both ways.

Aviva dividend move ends new CEO’s brief honeymoon

7 Mar 2019

The UK insurer will adopt a flexible approach to payouts rather than distributing a fixed ratio. Investors might have been less vexed had Maurice Tulloch, a company veteran who got promoted, been more specific on what he planned to do with the wiggle room apart from cutting debt.

Aon shows humble pie is a dish best eaten swiftly

6 Mar 2019

The insurance broker’s shares rebounded after it ditched its pursuit of Willis Towers Watson a day after admitting interest. As miner Barrick is finding, it’s awkward sticking with a deal investors distrust. Moving on early helps avoid permanent dents to credibility.

L&G gets an awareness of its own mortality

6 Mar 2019

The UK insurer’s shares fell despite a hiked 2018 dividend. L&G’s bulk annuity business is still delivering, but margins are under pressure. The bright spot is a windfall from customers dying quicker – but that’s because its actuaries got their forecasts wrong.

Aon’s big deal suggests size without benefits

5 Mar 2019

The insurance broker is mulling an all-share bid for $24 bln rival Willis Towers Watson. There’s a precedent: Willis Towers Watson itself resulted from a merger that delivered additional revenue, lower taxes and cost cuts. This time round, it’s hard to see the attraction.

Aviva’s new CEO is a vote against restructuring

4 Mar 2019

The UK insurer has appointed veteran Maurice Tulloch as chief executive. Aviva is overleveraged and undervalued, and selling its international operations offers a potential fix. But given doing so is hardly a no-brainer, an insider CEO may prefer more of the same.

All sides Scor poorly in French takeover debacle

5 Feb 2019

Covea’s $9.5 bln bid for a rival insurer collapsed amid a flurry of recriminations. Scor’s got no good plan and its stock has wilted. Covea’s boss is enmeshed in breach-of-trust allegations. Advisers are tarnished, too. Activists may be the only hope to right what’s wrong.