Insurance

ING solves first of its two home-grown problems

6 Nov 2013

The Dutch bancassurer is on course to repay 2008 state bailout money with interest, and restructure itself sooner than others that overstretched themselves. But with its own government keener than most to bash banks, ING still faces more regulatory curveballs than European peers.

Prudential can put domicile issue on back burner

12 Aug 2013

The UK-based insurer is meeting cash-generation targets for its fast-growing Asian business. Ultimately it needs to decide if it should move its HQ there. But with the shares strong and potentially harmful EU reform up in the air, Pru can do without radical changes of emphasis.

Apax shows how a clean leveraged buyout works

5 Aug 2013

The private equity firm is selling insurance broker Hub in a $4.4 bln deal for a tidy profit six years after taking it private. Apax used a big slug of equity and doubled EBITDA without siphoning off any special payouts for itself. Over to Hellman & Friedman to repeat the feat.

Texas puts life insurance trading back on the map

17 Jun 2013

The Lone Star state now encourages people to sell their policies, though only to pay for long-term care. Others may soon follow. Individuals get money early – though less of it – and governments save on medical costs. Even Wall Street may benefit if enough buyers step forward.

New York watchdog protests too much over insurance

12 Jun 2013

The state’s brash financial regulator rubbed fellow overseers the wrong way over Standard Chartered. Now he risks doing the same for insurers. His capital-inflation beefs are legitimate, but other U.S. regulators are on the case. What’s needed is coordination, not a vigilante.

Partnership’s success hinges on killer data set

7 Jun 2013

The insurer’s shares are up 20 pct even after pricing at the top of its IPO range. Its superior mortality data help it boss the ghoulish but high-growth market in annuities for those nearing death. Larger peers may crash the party. Then the IPO pricing won’t look so conservative.

How lucky SNS wasn’t based in Nicosia

6 Jun 2013

The Dutch bank has at last released its 2012 results, months after it was nationalised. Had SNS been headquarted in Cyprus, its hideous property losses might have warranted a depositor haircut. Bail-in’s champion, Jeroen Dijsselbloem, was much less gung-ho in his own back yard.

Rating cut says more about S&P than Warren Buffett

16 May 2013

Standard & Poor’s has taken Berkshire Hathaway down a notch to AA. But the downgrade is due to changes in the rater’s methodology rather than Buffett’s firm doing something to make a default more likely. Some tweaks are fine. But S&P could end up making ratings more of a muddle.

Esure’s IPO demands careful risk assessment

8 Mar 2013

An IPO could value the British motor and home insurer at 1.15 bln pounds. Rival Direct Line’s successful recent float helps, but the sector is undergoing dramatic changes. Investors need to believe esure when it claims that those will help, not harm, its business.

Aviva’s black dividend cloud has silver lining

7 Mar 2013

The UK insurer’s shares tanked after it slashed its dividend by 27 pct. A second payout cut in four years is a damning indictment of how Aviva has been run. But the necessary new cut should help its new chief executive untangle the company’s overleveraged corporate structure.

European insurer dividend angst looks overdone

21 Feb 2013

Allianz and AXA have respectively held and increased their dividends, a day after UK rival RSA cut its own. While all insurers are battling low investment yields, the larger players have more room for manoeuvre. The same logic should apply to the payout of fellow big beast Aviva.

HSBC/Ping An compromise saves face all round

1 Feb 2013

Chinese regulators have approved a Thai tycoon’s $7 bln purchase of HSBC’s stake in insurer Ping An. But the financing had to be rejigged. The Thais have rescued a juicy deal and the UK bank has avoided an embarrassing flop. The seemingly happy ending leaves much to be explained.

Generali’s radical words not yet echoed by deeds

14 Jan 2013

Italy’s biggest insurer is seeking 4 bln euros more capital by 2015 via selling assets. New CEO Mario Greco is rightly trying to move Generali away from its Italian power-broking past. But a really radical move would have been a sale of non-core stakes and a rights issue now.

Ping An flop could leave HSBC red-faced but richer

9 Jan 2013

The bank’s $9.4 billion plan to offload its stake in the Chinese insurer is in doubt. If regulators block the sale to a Thai billionaire, HSBC’s reputation will take a knock. Finding other buyers won’t be easy. But the recent market rally means the bank could end up better off.

AIG’s bailout helped, not harmed, shareholders

8 Jan 2013

The insurer’s pesky ex-CEO is suing the U.S. government and wants the company to sign on. It probably won’t, but the case is weak anyway. Shareholders did better than if AIG had gone bust, and the terms of the $182 bln rescue were kinder than private investors would have allowed.

Congress should push for mandatory gun insurance

17 Dec 2012

Firearm ownership is a U.S. constitutional right. But it comes at a cost. Requiring liability coverage could pass legal muster while helping to compensate victims. The market might also do a better job than politicians at keeping the most dangerous weapons from unstable hands.

AIG exit ties up one loose end for Geithner

11 Dec 2012

The Treasury secretary can rest a tad easier. He can now claim to have extracted the U.S. from its contentious $182 bln bailout of the insurer with a profit of $23 bln. But other Geithner legacies will weigh on his successor - notably an unreformed housing finance system.

HSBC proves canny trader with $9.4bln Ping An sale

5 Dec 2012

The emerging market lender flogged 16 pct of the Chinese insurer at a premium to the market price. That’s impressive compared with Bank of America and Goldman Sachs, who accepted discounts for their bank stakes. It should also buy HSBC time to explain its broader China strategy.

Swiss Life’s ill-advised M&A nightmare lives on

28 Nov 2012

The Swiss insurer has drawn a line under the ill-fated 2008 acquisition of AWD, the financial adviser. The brand will disappear, with 478 mln euros of book value. What remains is a problematic business that still sits uncomfortably within a conservative insurance outfit.

UnitedHealth takes risky $4.9 bln crack at Brazil

8 Oct 2012

The U.S. health insurer is paying around 40 times earnings for Brazilian market leader Amil Participações. UnitedHealth has grown fat on the American healthcare system. But when regulations are “100 percent different” there’s a danger the results will be too.