Insurance

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.

Private-asset binge exposes insurance to new risks

30 Nov 2023

US insurers hoovered up private loans from buyout firms last year in a profitable game of pass-the-parcel. Their hoard of alternative assets has swelled 65% in five years, and regulators are struggling to keep up. The March banking panic shows what can happen when firewalls fail.

Insurer mega-deal faces doubly poor prognosis

29 Nov 2023

Cigna and Humana are in talks to create a $135 bln giant. Overcoming near-certain trustbuster opposition likely means hiving off overlaps that would benefit either and enduring a year-plus wait. Judging by investors’ early response, that might cause them to nix the idea first.

Capital Calls: Arm, Insurers’ climate score

9 Nov 2023

Concise views on global finance: The $56 bln chip group said it can’t be sure when certain customer deals will translate into revenue, undermining its quest for a steadier top line; insurers are still too addicted to dirty energy, a new study shows.

Tough dealmaking conditions dull Waystar’s shine

31 Oct 2023

The healthcare technology firm is angling for a stock-market listing on the back of rapid, acquisition-fueled growth. With a sale looking difficult and heavy debt bearing down, an IPO may be its private equity backers’ best option, but a mooted $8 bln valuation looks steep.

One $16 bln deal travels lonely dual track

9 Oct 2023

Buyout shops GTCR and Apax may be exploring both a sale and an IPO for insurance broker AssuredPartners. Using two separate paths typically aims to create competitive tension and lift valuations. With equity, debt and M&A markets all cool, neither option poses a plausible threat.

Flood insurance swamps US government

11 Sep 2023

A federal scheme to back policies for water-logged homes is set to be renewed. Failing to do that would worsen a housing shortage. But the program is already laden with debt. Fixes like flood-prevention infrastructure can lower costs for the government and homebuyers alike.

Richard Li can afford to be fifth time lucky

11 Sep 2023

The tycoon’s Asian insurer FWD looks set to let its Hong Kong listing application lapse. Ending its fourth IPO push is sensible: it doesn’t urgently need funds. Yet Li’s multi-year run at a debut for his sober business is turning into a test for the languishing capital market.

Climate change turns US utilities grimly exciting

31 Aug 2023

Hawaii’s biggest electricity provider is at risk of bankruptcy after wildfires destroyed a town. Increased capital expenditure can mitigate, but not eliminate, damage from storms and heat. Little wonder investors are slowly waking up to the dangers posed by litigious customers.

Revamped Pru faces up to an old problem

31 Aug 2023

CEO Anil Wadhwani boosted the insurer’s new business profit by a third in the first half and laid out new growth targets. But despite shedding its UK and US arms to focus on Asia, the $35 bln group’s valuation still lags rival AIA. A slowdown in China makes it harder to catch up.

Capital Calls: 3M settles again

29 Aug 2023

Concise views on global finance: The industrial conglomerate has followed a $12.5 bln agreement over long-lasting chemicals known as PFAS with a $6 bln deal to resolve one of the largest mass torts in U.S. history. A portion of it, however, comes in stock.

Global insurers surf China’s storm while they can

24 Aug 2023

AIA’s value of new business in Hong Kong more than doubled in the first half. The $100 bln giant and peers are benefitting again from selling policies to returns-hungry mainland visitors. Insurers may become victims of their success if Beijing’s angst over capital flight deepens.

Climate change eats into reinsurers shrinking pie

18 Aug 2023

Wildfires and other catastrophes caused $120 bln of damage in the first half of 2023, far above the 10-year average. Bigger losses allow groups like Swiss Re and Munich Re to raise prices. That may ultimately make cover harder to afford, forcing governments to step in instead.

Capital Calls: Illumina, Domino’s Uber delivery

12 Jul 2023

Concise views on global finance: The EU fines the $30 bln genetic test maker 432 mln euros for closing its 2021 Grail deal prematurely; the pizza chain known for its own delivery app is expanding its service with Uber Eats, a smart move to nab more orders from fickle customers.

Capital Calls: Diverse workforces

5 Jul 2023

Concise views on global finance: The court’s ruling against affirmative action could make future workforces more homogeneous. That’s a bitter pill for the US Federal Reserve, which has pushed for a more inclusive labor market.

Ghost of Silicon Valley Bank turns up in Italy

4 Jul 2023

Like the bust US lender, insurer Eurovita bought up long-dated state bonds. A mix of losses from rising rates and redemptions mean banks that sold its wares have had to extend 6 bln euros of guarantees. As with SVB it’s a special case, but one that will still worry regulators.

Capital Calls: China’s central bank, Generali

3 Jul 2023

Concise views on global finance: The People’s Bank of China plays it safe by earmarking Pan Gongsheng as its new governor; the Del Vecchio family gets the green light to own more than 10% of the 30 bln euro Italian insurer.