Insurance

China insurer adds U.S. to overseas M&A splurge

10 Nov 2015

Anbang has popped $1.6 bln Fidelity & Guaranty Life into its basket. In 12 months it has spent $4.4 bln on financial groups in South Korea, the Benelux and now America. The strategy is vague and funding opaque. For sellers, though, the Waldorf Astoria owner livens up any auction.

G-SIFI envy turns into G-SIFI ennui

3 Nov 2015

Not long ago, being on the list of 30 “global systemically important financial institutions” was a big deal. The lack of market reaction to the newly updated version shows times have changed. Gung-ho local regulators now make banks pile on capital, systemically important or not. 

Dismal AIG earnings add fuel to Carl Icahn’s ire

3 Nov 2015

The activist wants the insurer to break up and cut costs. AIG boss Peter Hancock is pledging to do the latter. But a $231 mln Q3 loss emphasizes just how much work the company still has to do to get shareholders on board. A carve-up may be painful, but it’s not off the table yet.

AIG’s post-crisis babying days are over

28 Oct 2015

Carl Icahn has delivered the $80 bln insurer a rude awakening. The pushy investor isn’t satisfied with CEO Peter Hancock’s steps to boost performance and wants the company to split and shed its systemic tag. Say goodbye to any lingering sympathy for AIG’s near-death experience.

Insurer TBTF capital rules take baby step forward

5 Oct 2015

Regulators want to stop global insurance groups being too big to fail. New solvency add-ons make sense, and for now insurers don’t need extra capital. But the models are sensitive to volatile markets, and politics may impede a further leveling of the international playing field.

Garrett-Cox demotion could herald Alliance breakup

1 Oct 2015

The Alliance Trust CEO will step down to lead the struggling investment firm’s asset management division. Katherine Garrett-Cox will have to meet tough performance targets, or lose her mandate. Activist Elliott wanted more, but her probation is still a coup.  

EU establishes bridgehead in capital markets push

30 Sep 2015

Brussels is to unpick self-defeatingly high capital charges against infrastructure and asset-backed bonds. It is capital markets union’s first tangible win. Yet other barriers like diverging insolvency regimes have been shelved, and tighter regulation is making trading harder.

Swiss Re deal sidesteps insurance bad-M&A trap

23 Sep 2015

The Swiss group is paying Cinven 1.6 billion stg for Guardian Financial, a closed-book consolidator. Recent mergers in the sector have tended towards the value-destructive. Speeding up the capital release from Guardian’s policies should mean Swiss Re avoids that bad habit. 

Zurich’s loss of RSA nerve dents its credibility

21 Sep 2015

The Swiss insurer has binned plans to buy its UK peer - and issued a profit warning. A deal at the mooted 5.6 bln stg level could have worked, given RSA’s potential. If Zurich doubted RSA’s ability to recover, it shouldn’t have sniffed around in the first place. 

Mitsui Sumitomo assumes a lot with Amlin swoop

8 Sep 2015

The Japanese insurer is paying 3.5 billion stg for the second-biggest insurer in London’s Lloyd’s market. Paying a big premium for already well-valued overseas assets is becoming a national trend in Japan. Mitsui will need punchy synergies to hit its target’s cost of capital.

Novo Banco has issues – Chinese owner or not

2 Sep 2015

Insurer Anbang is no longer in line to acquire the bailed-out Portuguese bank. Yet given rival Chinese group Fosun remains in the race, Chineseness is unlikely to be the problem. Any buyer for Novo Banco needs to get comfortable with its uncertain capital and litigation bills. 

Zurich buys protection with 5.6 bln pound RSA bid

25 Aug 2015

The Swiss insurer has made a 550 pence-per-share indicative offer for its UK peer. At that price, it could achieve a 10 pct return with fairly undemanding cost savings. Twitchy markets may help Zurich clinch a deal that both sides’ shareholders can argue is a fair result.

Aegon gives peek at insurers’ new capital gremlins

13 Aug 2015

The Dutch insurer’s shares slumped after it adjusted down its estimated capital ratio under new Solvency II rules. Before the new metrics go live next year, more insurers could unearth nasty surprises. Even after, capital positions are set to be more volatile. 

UK death-insurance merger makes future less morbid

11 Aug 2015

Partnership and Just Retirement are combining in an all-share deal. The business of offering annuities to high-risk customers got smacked by regulatory shifts in 2014, and both trade below 2013 listing prices. Cost savings make things better, but the sector is still in flux. 

Buffett’s $37 bln Castparts deal lacks precision

10 Aug 2015

The Oracle’s Berkshire Hathaway is paying 19 times earnings for aircraft components maker Precision Castparts. The acquisition fits Buffett’s mold, but also coincides with cyclical highs in plane orders, stock valuations and M&A. Even for a long-term investor, the timing is odd.

Allianz takes Pimco’s fall from grace in stride

7 Aug 2015

With assets under management and profit falling, the German insurer’s Pimco arm is still reeling from boss Bill Gross’ acrimonious exit. But Allianz can ride it out. Its insurance division and a growing in-house asset manager mean it can stick to full-year targets. 

Zurich can justify a swoop on RSA

6 Aug 2015

The Swiss insurer released disappointing results but thinks its UK peer remains a good fit. Zurich’s hurdle rate for investment is around 10 percent. Offering 600p a share for RSA, a 36 pct premium, should allow that without synergy assumptions being too ambitious.

Agnellis rebalance portfolio – at a price

3 Aug 2015

The Italian family’s Exor vehicle has won the fight for PartnerRe with a $6.9 bln bid after the reinsurer’s board finally switched sides. Three months of bolshie resistance paid off, and Exor boss John Elkann is paying handsomely to diversify away from Fiat Chrysler Automobiles.

Zurich should look hard before it leaps at RSA

28 Jul 2015

The Swiss insurer wants to invest free capital rather than give it back to shareholders. UK-based RSA, at 5 bln stg, is an attainable target. But Zurich Insurance might first examine the disastrous 1996 deal that created the company formerly known as Royal & Sun Alliance. 

Agnellis nudging PartnerRe out of rival’s reach

20 Jul 2015

Exor, the Italian family’s investment vehicle, has a better offer for the Bermudan reinsurer than Axis. Common shareholders would get more money, in cash, and preferred stockholders extra assurances. A last-minute counter by Axis would hurt its and PartnerRe’s investors.