Insurance

Anthem investors don’t get cyber risks, either

5 Feb 2015

Data breaches at the likes of Target, Home Depot and Sony have put once-complacent managers on notice. But the small impact on the stock of the $37 bln No. 2 U.S. healthcare group after up to 80 mln records were compromised suggests shareholders are still not alert to the danger.

MetLife SIFI suit is risk for harried watchdogs

14 Jan 2015

U.S. courts have squelched a slew of securities and commodities rules. Systemic tags may be next as the insurer challenges its big-and-risky designation. Activist judges are often blamed, but sloppy, rushed regulators are likelier culprits. More watertight rulemaking is in order.

MetLife’s Snoopy takes on the regulatory Red Baron

13 Jan 2015

As JPMorgan showed, challenging Wall Street’s overseers can come back to haunt. Now MetLife boss Steve Kandarian is taking his insurer’s designation as a SIFI to a U.S. federal court. He may have a point, and the right to legal redress, but his stance carries risks of its own.

Wearable tech will go from novelty to necessity

31 Dec 2014

Activity trackers like Jawbone and Fitbit gather vast quantities of deeply personal data. Consumers aren’t always keen to overshare. But healthcare and insurance companies are finding ways to make it worth their while. Geeky gadgets could soon become too useful to ignore.

Bank cyberinsurance is overdue to come of age

23 Dec 2014

It’s a confusing market, but growing fast. No wonder with a huge breach at JPMorgan in 2014, never mind monsters at Sony and Home Depot. Add a Washington campaign, and insurance may become standard. As well as financial cover, that could improve security – but only at the margin.

Jefferies closes annus horribilis on wicked downer

16 Dec 2014

The Wall Street firm racked up a $93 mln fiscal Q4 loss. Boss Richard Handler says a senior banker’s messy public divorce had no material effect. Poor trading, a bum acquisition and one big bad debt took their toll. It’s a damaging concoction that should be limited to Jefferies.

EU insurers’ solvency is shakier than it looks

16 Dec 2014

A quarter of Europe’s insurers would fail to meet a basic gauge of capital health if Japan-style low-yield conditions were to persist, recent stress tests found. But actual euro zone yields are even lower. With the bloc on the brink of deflation, that’s not a reassuring sign. 

Market too cool on Aviva-Friends tie-up

2 Dec 2014

Some investors see another value-destructive UK insurance merger. At about 20.5 bln stg, the pair is worth no more than before the deal leaked. But even if synergies are worth less than the 1.8 bln stg claimed, the fact they come from fund management as much as IT is cheering.

Friends Life deal terms make an auction tricky

25 Nov 2014

The UK insurer is a bite-sized acquisition for bigger European peers. But both foreign and domestic buyers can see that Aviva has offered Friends a full price that pays away lots of synergy value. And matching Aviva’s premium could be just as tough for consolidators like Phoenix.     

Aviva pays high price for Friends leak

24 Nov 2014

A fall in the UK insurer’s shares has cut the value of its possible paper offer for domestic peer Friends Life. The premium is now well below the 15 pct first mooted. Forced early disclosure means Aviva has to set out the key strategic and financial details of a tie-up – fast. 

Pru’s lesson for investors: trust animal spirits

21 Nov 2014

The UK insurer’s stock hit a record this week, leaving rival Aviva trailing in its wake. It is a painful reminder of how Aviva lost out by failing in its attempt to buy Pru in 2006. The main reason there was no deal? The bidder lacked investor support to pay a fair premium.

Allianz divi hike is bold bet on life after Gross

7 Nov 2014

Europe’s top insurer is raising its payout ratio closer to peers’ and says this year’s dividend is a floor. For now, it’s an affordable signal of confidence that Allianz’s Pimco fund can thrive after the exit of founder Bill Gross. But the policy will be a challenge for the new CEO.

AIG owners’ bailout suit has law and gall on side

29 Sep 2014

Claims Uncle Sam cheated the insurer’s ex-CEO and others while also saving them may actually succeed at trial. Extracting terms like an 80 pct equity stake in exchange for rescuing AIG was legally questionable. Proving damages will be tricky, but never underestimate chutzpah.

Standard Life’s strategic revamp gets timely boost

4 Sep 2014

The UK insurer will return 1.75 bln stg to shareholders after selling its Canadian insurance arm. Standard’s shares had underperformed domestic peers. Offloading a non-core asset at a good price should make investors more cheery about the risks of shifting into asset management.

Risky AA just got riskier

28 Aug 2014

The chief exec and CFO are quitting the breakdown firm two months after the IPO. It may not be a post-float car crash: the market seems to like the show of decisiveness by the chairman, now de facto CEO. But the timing is troubling, as is AA’s rejection of conventional governance.

Pru just shades AIA in battle of Asian insurers

12 Aug 2014

Interim numbers show the UK-domiciled Prudential and its Hong Kong-based peer are both still growing new business at breakneck speed in Asia. AIA generates more cash right now. But the Pru’s geographic mix in the region makes its shares the slightly better long-term bet.

Rob Cox: MetLife CEO should revel in his anonymity

29 Jul 2014

That almost no one knows ol’ so-and-so is good for shareholders. How he handles the mega-insurer’s likely designation as a systemic threat could change that. A Jamie Dimon-style fight would be foolish. Better to speak softly and keep the name Steve Kandarian out of headlines.

Capacity doubt hangs over booming longevity market

7 Jul 2014

The pension scheme of UK telco BT has offloaded 16 bln stg of longevity risk in the largest deal of its kind. Demand is fed by reinsurers. Yet reinsurance capacity will only go so far. Conventional capital markets may have to play a bigger role.

Racy debt makes the AA’s IPO a high-octane bet

12 Jun 2014

The British roadside recovery firm is floating at an enterprise value of 4.3 bln stg. Buyers could get a bargain, but they need to be comfortable with life in the fast lane. Private equity sellers have left the AA towing abnormally large debt.

Benmosche leaves new AIG boss suitably normal job

11 Jun 2014

The colorful CEO bullied, blustered and cajoled his way to a new start for the insurer after its $182 bln bailout. He streamlined AIG, beefed up capital, wound down derivatives and helped Uncle Sam offload its stake at a profit. Successor Peter Hancock has a different challenge.