Insurance

GE’s legacy losses reinforce case for breakup

16 Jan 2018

A $6.2 bln charge relating to reinsurance - a business the company exited over a decade ago - shows the challenge of managing a conglomerate. CEO John Flannery is struggling to shrug off the past and turn to the future. At least he’s open-minded enough to consider a GE carve-up.

Buffett’s next act is a disappearing trick

10 Jan 2018

The boss of $500 bln Berkshire Hathaway has promoted two deputies in a nod to succession. Replacing a legend is nigh on impossible, so it would make sense to split the investor’s job into several. Buffett’s task now is to fade away gracefully and let his successors run the show.

Capital glut will overwhelm rising disaster losses

21 Dec 2017

Hurricanes and wildfires doubled estimated catastrophe-related insurance claims to $136 bln in 2017. Reinsurers and cat-bond holders have had a bad year. A hotter planet suggests more pain. But a surfeit of investors chasing uncorrelated returns will keep the cash flooding in.

The Exchange: Newark Mayor Ras Baraka

20 Dec 2017

Will Amazon choose New Jersey's largest city as the location for its second headquarters? That's what hometown native Baraka is hoping - and he's lobbying hard to make it happen, even trying to cajole neighboring New York City to play a role in swaying the e-commerce juggernaut's decision.

Home-healthcare company pulls plug on itself

19 Dec 2017

Kindred Healthcare has gone out with a whimper, selling itself for a 5 pct premium to insurer Humana and two private-equity firms. Management may have been a bit too eager to put an end to the company’s uncomfortable public existence with the $4.1 bln deal.

Old Mutual sale pays off for star manager

19 Dec 2017

Veteran Richard Buxton and private equity group TA Associates are buying the company's "single strategy" investment arm for 600 million pounds. It's another step forward in Old Mutual's streamlining and breakup plan, but the acquirers look to be getting the best of the deal.

Zurich Insurance gets a fair dinkum deal from ANZ

12 Dec 2017

The Swiss insurer is buying the Australian bank’s life insurance businesses for $2.1 bln, giving it a big distribution network and positioning it as the largest operator in retail life insurance Down Under. The reasonable price rewards Zurich for helping ANZ streamline.

Viewsroom: Executive payouts in rude health

7 Dec 2017

Aetna CEO Mark Bertolini is bagging $500 million from selling the insurance company to drugstore chain CVS – despite only a middling performance as boss. Behind such healthcare mergers: a desire to cut out a surfeit of middlemen.

Healthcare goliaths cut out the middleman

6 Dec 2017

The U.S. healthcare system is full of intermediaries chasing after a share of the industry’s profit, often by gaming each other. UnitedHealth Group’s $4.9 bln purchase of a physicians group from DaVita is the latest example of trying to cut costs by eliminating links.

Sabotaging Obamacare backfires on Republicans

22 Nov 2017

President Trump claims his predecessor’s health-insurance program is dying. He and the GOP have eliminated some subsidies and slashed marketing. Yet the pace of enrollment has risen from last year. The political cost of efforts to kill the program is rising.

AIG’s new boss creates flashback to its old one

3 Nov 2017

A $1.7 bln quarterly loss at the U.S. insurer abruptly ends Brian Duperreault’s honeymoon. Hurricane hits were expected, but an $836 mln addition to reserves for prior years was not. That’s the kind of problem the new CEO was meant to fix. AIG needs some underwriting discipline.

Aetna lays out its insurance value for CVS

31 Oct 2017

Revenue at the $56 billion health-coverage firm fell 5 pct last quarter, partly from dumping some Obamacare policies. But profit jumped 48 pct. That offers alluring protection for CVS, whose pharmacy and drug-benefit business is threatened by rising competition and transparency.

Ping An’s tech dreams far from assured

29 Oct 2017

China's biggest insurer reported a big leap in profit, powered in part by online users and AI initiatives. It also added 300,000 agents, suggesting old-fashioned growth in selling policies. That makes it hard to value Ping An in the same silly way as newly listed rival Zhong An.

Aetna bid is a defensive prescription for CVS

26 Oct 2017

The drugstore and pharmacy-benefit company’s $66 bln offer for the health insurer should generate some savings. More important, it could help the firm resist Amazon’s entry into drug distribution, and the unpleasant side effects of transparency and low margins that may follow.

TPG’s car-insurance deal comes with a warranty

18 Oct 2017

The buyout group and Uber investor is selling car insurer Warranty to Assurant for $2.5 bln, taking a 23 pct stake and some cash. It looks to have doubled its money. Taking shares as payment isn’t a full exit for TPG, but it leaves both parties assured of respectable returns.

Charmed life for Indian IPOs may be short

28 Sep 2017

Huge inflows of domestic cash and a lack of healthy financial stocks have helped two insurers float at punchy valuations. At this rate, India is on track for a record year for new issues. But foreigners are selling and the economy looks shaky. Would-be issuers need to move fast.

Hit IPO undercuts the case for new Hong Kong board

28 Sep 2017

Shares in Chinese online insurer ZhongAn soared on their debut. This deal suggests the bourse’s push for a new venue with looser standards is misguided. The city should be able to lure desirable Chinese tech listings just fine by making tweaks to the existing regime.

AIG deserves to be SIFI-free, with caveats

25 Sep 2017

Watchdogs delayed a decision on whether to remove the insurer’s status as a systemic risk. It seems justified, as AIG has halved in size since its $182 bln bailout and long ditched the unit behind its collapse. But regulators should use safeguards to avoid deregulating too far.

FDIC is last defense against Dodd-Frank rollbacks

22 Sep 2017

Wall Street bankers are counting down the days for the term of Chair Martin Gruenberg, an Obama administration holdover, to end in November. Trump has yet to tee up a successor, however. The longer the Volcker Rule and living wills stay as is, the harder it may be to undo them.

AIA’s new boss gets a good deal in Australia

21 Sep 2017

New CEO Ng Keng Hooi is buying local life insurance units from the scandal-hit CBA. The move shores up AIA in an important market. Growth at the targets has been lacklustre. But a headline price of $3 bln implies a slim premium, with potential to grow sales and cut costs.