Insurance

Old Mutual takes the slow road to breakup

11 Aug 2016

The South Africa-focused financials group announced a split earlier this year. Favourable currency moves mean its South African operations are now worth more. But a poor first half for its flagship UK wealth manager suggests a listing could take longer to materialise.

Prudential’s Brexit-padding does the job

10 Aug 2016

The UK-based insurer beat forecasts in the first half, helped by the fact 70 pct of operating profit comes from outside the EU. But its UK asset manager is doing worse than peers, and low rates hit it too. Pru still looks reasonably diversified, just not so well balanced.

Megadeal gets India’s insurers set for public life

9 Aug 2016

A fiddly merger between two foreign-backed players will create India's largest private insurer, and give the $10 bln group a public listing. Others are queuing to IPO. Stock markets will help fund growth – and end state dominance of a sector that does not yet reach enough people.

RSA and Aviva have hedge against Brexit gloom

4 Aug 2016

Both UK insurers can dodge post-EU referendum blues. Falling rates pose a risk to their half-year positions, but operations are solid and sterling's slide helps groups with big overseas earnings. Losing EU market access is also less of a threat than it might appear.

UK banks’ light at the end of PPI tunnel darkens

2 Aug 2016

British lenders smarting from Brexit and EU stress tests face redress for mis-sold loan insurance lasting a year longer than expected. An actual cut-off date beats none at all. But the delay means fines relating to commission mis-selling will further inflate PPI's $32 bln cost.

China insurers’ worst habits go almost unchecked

26 Jul 2016

The insurance watchdog is looking for trouble in the wrong places. It is warning over the industry’s riskiest investments from corporate raiding to big M&A. But it could do more to rein in the high-yielding products insurers offer that underpin the hunt for outsize returns.

U.S. health insurer M&A has only death-row chances

21 Jul 2016

The Department of Justice has filed to stop Anthem's $44 bln purchase of Cigna and Aetna's $33 bln deal for Humana. They may try to fight, but the odds aren't with them. The government's arguments look strong, and President Obama's antitrust prosecutors are on a winning streak.

U.S. healthcare mega-deals get grim diagnoses

8 Jul 2016

Aetna's $34 bln acquisition of Humana and Anthem's $44 bln plan to buy Cigna are risky propositions to shrink the industry from five big insurers to three. Investors now expect both mergers to die. If right, the companies also would return to independence worse than they began.

AXA outsources upside to Mario Draghi

21 Jun 2016

The French insurer’s new five-year strategy expects annual earnings growth of 8 percent. If rates don’t rise, however, that will be more like 3 percent. Unless the ECB can gee up the euro zone economy, matching assets with liabilities will remain a struggle for all insurers.

Thaihot’s $1.4 bln HK insurance deal looks fiery

3 Jun 2016

The little-known Chinese group has paid almost double recent valuations for local bank Dah Sing's insurance unit after a fierce auction. The deal is part of a drive to diversify from property. But China's currency controls may interfere with efforts to attract mainland customers.

Egos may kill $54 bln health deal before watchdogs

23 May 2016

Cigna and Anthem haven’t consummated their merger, yet the U.S. insurers are squabbling over a lawsuit, information sharing and executives’ roles. The disharmony could make the deal fall apart. At the very least, it will make it harder to push it past antitrust regulators.

Credit Suisse labours to spin misfortune into gold

20 May 2016

A bond that wipes out if the Swiss bank encounters big operational losses, from rogue trades to cyber crime, has not been an easy sell. Even for investors who specialise in natural catastrophes, this product is esoteric. Such cleverness is impressive, but unlikely to catch on.

Aegon mixes short-term pain, long-term plain

12 May 2016

The Dutch insurer saw its capital position fall after changes to its hedging strategy led to a 50 pct year-on-year fall in earnings. New solvency rules mean capital ratios will move about more. That’s not great when markets are volatile too.

MetLife’s SIFI label doomed by D.C. double-talk

7 Apr 2016

A U.S. judge tossed the insurer’s designation as a systemically important financial institution because a regulator couldn’t keep its story straight. FSOC said it both had and hadn’t changed its rules, prompting a decision that it acted arbitrarily. An appeal will be tough to win.

Inflation insurance is new U.S. fad

5 Apr 2016

Investors have a new-found appetite to buy American bonds offering protection against price rises. U.S. inflation is finally ticking up and could overshoot the Fed’s 2 pct target. With Europe showing no such signs, though, the fashion won’t cross the Atlantic any time soon.

GE Capital shows systemic tagging is working

31 Mar 2016

GE’s finance unit wants the U.S. to end its too-big-to-fail designation now that it has slashed size and risk. MetLife, which a court just freed from its label, had initiated a breakup. Even big banks have trimmed a bit. SIFI-dom’s burdens may be achieving what lawmakers wanted.

MetLife SIFI heroics give Uncle Sam a headache

30 Mar 2016

The insurer has won its battle to overturn its designation as a systemically important financial firm. CEO Steve Kandarian is now the toast of Wall Street, even if few can emulate him. It’s a big defeat for regulator FSOC, though, which is also facing attacks on other fronts.

In China, life insurance doesn’t last a lifetime

22 Mar 2016

Customers have piled into policies that let them cash out early while pocketing high returns. The need to attract punters is forcing insurers to buy riskier assets. Now regulators are reining in the practice. The crackdown should make the industry safer, but also less profitable.

Marriott’s Starwood deal suffers China syndrome

21 Mar 2016

To trump an interloping bid from Beijing’s Anbang, Marriott raised its offer for its hotelier rival to $13.6 bln. Even with more cost cuts, the math suggests significant value destruction. Anbang may have reasons to pay up, but Western buyers can’t be so careless of shareholders.

AXA stalwart would be partial fix for HSBC

21 Mar 2016

The UK bank already said it will choose an outsider as its next chair. Board member Henri de Castries, stepping down at French insurer AXA, fits the bill. Ideally though, HSBC would pick someone who hadn’t committed the governance no-no of simultaneously being chairman and CEO.