Insurance

Japanese insurer pays up for U.S. protection

4 Jun 2014

Dai-ichi Life is spending $5.7 bln in cash on Alabama-based Protective Life. Like many other Japanese acquirers, it’s paying a big premium for minimal synergies. Foreign insurers have struggled in America. But the need to escape a shrinking home market helps justify the risk.

Pimco outflows are wakeup call for Allianz

14 May 2014

The bond fund saw 22 bln euros of net outflows in Q1. Controversy over the role of founder Bill Gross is arguably a big factor. Allianz, Pimco’s parent, suggests it can take the trials in its stride. But its hands-off approach is becoming increasingly hard to justify.

UK investors wake up to asleep-at-the-wheel charge

11 Apr 2014

Disunity is one reason institutional shareholders look drowsy in the face of corporate excesses. Reforms to the way UK-based investors cooperate on governance could make them more alert by setting and enforcing clear standards. The risk is they default to cruise control.

UK authorities show worrying market ignorance

31 Mar 2014

Insurance stocks fluctuated wildly after the government and the regulator each broke price-sensitive news in a clumsy fashion. The failure to anticipate market mayhem betrays poor instincts. It argues for tighter rules around dissemination of news by those that supervise.

UK insurance investors learn to assume the worst

28 Mar 2014

Shares in Britain’s big insurers have fallen sharply on news of a probe into possible mistreatment of some customers. As with recently announced pension reforms, incomplete information has added to the fear. Still, it is possible to rationalise the 4 bln stg hit to market values.

Edward Hadas: In defence of financial coercion

26 Mar 2014

Forcing people into bad economic choices sounds awful, but it can’t be avoided in a complex economy. The right question is not whether to coerce, but who. Savers are getting a bad deal today. Their sacrifice seems to be in vain. The UK’s solution is to coerce a different group. 

Standard Life prepares well for tougher times

26 Mar 2014

Shareholders see big benefits in the UK investment group’s agreed purchase of smaller rival Ignis. More was added to the buyer’s market value than it spent on the acquisition. But new rules and expectations for fund managers mean that Standard’s life may not always be this easy.

RSA underwriters can sleep soundly

25 Mar 2014

The insurer’s 773 mln stg cash call has priced at a 33 pct discount to the shares’ theoretical price on completion. That’s narrower than other rights issues. But the underwriters look safe. The deal is small relative to the market cap and RSA has already cut balance-sheet risk.

British insurers trade in damaged market

19 Mar 2014

Usually, governments discuss new policies with everyone concerned. But the UK Treasury has thrown the insurance sector into turmoil with a surprise plan to stop forcing pensioners into annuities. Share prices have gyrated. It will be a while before investors get over the shock.

Pru proves it is more than a one-trick pony

12 Mar 2014

The UK-based insurer’s Asian exposure has left some investors questioning whether Prudential will be hit by emerging market outflows. But 2013 results show its eastern growth story is largely intact. Meanwhile improving fortunes in the U.S. mean it has a second area of strength. 

Regulator helps Aviva solve overhang problem

6 Mar 2014

The UK insurer is hacking back a complex corporate structure that entailed one part of the group lending heavily to another. Pressure from the UK supervisor was a factor. But Aviva aggressively went along to remove a key uncertainty. That will give investors comfort. 

Pimco’s Gross leaves Allianz with a dilemma

27 Feb 2014

Market softness and currency shifts may challenge Pimco, the world’s biggest bond manager, in 2014. Legendary boss Bill Gross has a strong record to fall back on. But questions over both performance and his style mean his German masters can’t ignore the question of succession.

More careful aim needed for U.S. insurance bazooka

25 Feb 2014

Congress is considering both flood and terrorism backstops this week. There may be a role for the feds, but not if it usurps private markets. And if lawmakers want to check Uncle Sam’s actuarial ambitions, they could start with the most sweeping: mortgage guarantees.

Allianz hits back of the net with FC Bayern deal

13 Feb 2014

Germany’s largest insurer is paying 110 mln euros for an 8.3 pct stake in the country’s most successful soccer club. Allianz has got a slightly cheaper deal than Audi’s investment in the team in 2010. And its clout as a giant institutional investor may spur improved governance.

AIG settles for connecting flights to exit ILFC

16 Dec 2013

The insurer is getting $5.4 bln for its aircraft-leasing arm - just 75 pct of book value. AIG gets two-fifths of the price in rival AerCap’s stock, and is providing a $1 bln line of credit. CEO Bob Benmosche hasn’t found the cleanest deal, but it is a glide path to independence.

RSA firesales could bring new headaches

13 Dec 2013

The UK general insurer’s CEO has quit and its shares have tanked after a third profit warning. The chairman is reviewing RSA’s empire and could sell units to shore up the capital position. But a piecemeal sale of crown jewels like Scandinavia would create its own problems.

Pru throws down gauntlet to taper doomsayers

10 Dec 2013

Having hit four-year growth targets, the UK insurer plans to double cash generated from fast-growing Asian operations by 2017. The worry is that Fed tapering leads to a slowdown in the region. But Pru’s market position is so entrenched that it would be wrong to bet against it.

Europe’s Solvency II deal is better than nothing

14 Nov 2013

Brussels has completed its tortuous quest to harmonise the way Europe’s insurers work out capital reserves. Solvency II has so many national carve-outs that its original aim has almost been lost. But it’s a step forward – if only because insurers can now stop fretting about it.

Insurers are killjoys at London’s IPO party

13 Nov 2013

A sales warning lopped 22 pct off Partnership Assurance shares, months after the annuity group listed. Peer Just Retirement, which floated this week, is also underwater. Next year could be better. But the duo have dented the UK’s otherwise robust IPO market.

RSA isn’t in opportunistic bid territory yet

11 Nov 2013

The UK insurer has suspended its Irish bosses and issued a new profit warning. Potential predators like Allianz will have noticed. But despite a share-price rout, RSA isn’t cheap enough to make up for all the uncertainty. That buys management some breathing space.