Insurance

GE deal epitomizes U.S. bank regulation folly

24 Sep 2012

To free itself from the Fed’s strong grip, MetLife opted to unload $7 bln of deposits to the U.S. conglomerate. Tired of waiting for the headless FDIC’s OK, the insurer is enlisting the OCC instead. This classic arbitrage illustrates the trouble with the whole oversight regime.

Resolution shouldn’t give critics any more ammo

16 Aug 2012

Clive Cowdery’s insurance conglomerate is locked into paying fees to its M&A advisory arm despite ending its acquisition strategy. The fees are relatively small and cover expenses as well as salaries. But Resolution’s execs must be seen not to profit as the arrangement unwinds.

Aviva finally turns to face the right way

9 Aug 2012

Investors should look past the UK insurer’s weak first half. Following a management clear-out, Aviva is finally facing up to weaknesses, the most serious of which concerns capital. Chairman John McFarlane now needs to find a credible chief executive to implement the turnaround.

Winner’s curse haunts banks in Asian block trades

27 Jul 2012

The banks that arranged a $720 mln quick sale for Carlyle in China Pacific Insurance look to have taken a licking on the trade. Block deals may help league table credit, especially when business is moribund. But aggressive bidding can leave a bitter aftertaste.

Generali coup risks one more reason to sell Italy

1 Jun 2012

Shareholders, led by Mediobanca, are seeking to oust the boss of the country’s largest financial institution. Italy could do with a dose of shareholder activism, but this coup may do little to dispel its reputation for intrigue, hardly good for a country in crisis.

Pru vote heralds new normal for investor protest

17 May 2012

A third of shareholders voted against the UK insurer’s pay report, miffed at retrospective tinkering with targets. A solid performer like Pru might once have suffered only mild gripes. But the shareholder spring means transgressions now meet with much meatier disapproval.

ABI red tops add force to shareholder spring

10 May 2012

The UK investor group has issued two rare “red top” alerts reflecting misgivings about London-listed Cookson and 888, people familiar with the matter say. Directors at both may survive the dust-up. But the ABI is a powerful ally for owners getting tougher on pay and performance.

Shareholder spring claims first scalp at Aviva

8 May 2012

The UK insurer’s CEO is stepping down following a big protest vote over pay. Strategic doubts and underperforming shares had already put Andrew Moss’s future in doubt. But his departure raises the stakes for future shareholder uprisings - for both bosses and investors.

Buffett Rule divides Berkshire Hathaway faithful

6 May 2012

Ideological squabbling marred the annual Omaha love-fest this year. Ice-cream bars and newspaper tosses weren’t enough to distract shareholders angry about the politically charged tax plan with Warren Buffett’s name on it. It may even be an unplanned liability to Berkshire.

Shareholder spring takes aim at exec pay black box

3 May 2012

UBS and Aviva are the latest firms to feel the executive pay backlash. As the stream of votes against boards’ remuneration swells, shareholders have a golden opportunity to secure meaningful reforms. Moves that clarify performance targets will be top of the agenda.

Aviva provokes subtly different shareholder spring

30 Apr 2012

The UK insurer is the latest company to review executive pay in response to investor pressure. Shareholders may have been emboldened by a rising tide of pay revolts elsewhere. But discontent at Aviva seems as much about long-term underperformance as short-term pay excess.

Unipol probe may further muzzle Italy powerbrokers

27 Apr 2012

The Italian antitrust agency has halted bidding for Fondiaria, the country’s second largest insurer. Blocking a currently favoured bid from Unipol would be good news for minority investors. But coupled with new boardroom curbs, it could also strike another blow for corporate reform.

U.S. sale could kickstart Aviva’s spring clean

12 Apr 2012

The UK-based insurer is mulling a sale of its U.S. arm, according to reports. Offloading North American operations would make regulatory sense. But it would also be a welcome sign that Aviva is getting to grips with parts of its empire that aren’t pulling their weight.

Obama backs healthcare defender – until he doesn’t

29 Mar 2012

Despite top lawyer Donald Verrilli’s stumble before the Supreme Court, the White House gave him a confidence vote. That’s what famed Yankees manager Billy Martin would get before being fired. Verrilli’s miss may not change the result but it costs him credibility - if not his job.

Paulson gets small redemption with the Hartford

21 Mar 2012

The hedge fund investor’s funds lost on average above 25 percent of their value in 2011 as bets on everything from financial sector recovery to Chinese forests went pear-shaped. A bit of activist success with the U.S. insurer is some consolation - but Paulson needs more than that.

EU eases insurers’ worst capital fears – for now

21 Mar 2012

The European Parliament has accepted that British insurers need protection from the EU’s sprawling new regulatory framework. That’s a relief. But the Solvency II rules could yet have unpleasant consequences. The likes of Pru could still move their headquarters away from Europe.

Prudential’s threat to quit UK isn’t just hot air

12 Mar 2012

The insurer is reviewing its domicile, citing the burden of European regulation. Upping sticks to Hong Kong wouldn’t protect Pru from all the reforms, and would yield few tax savings. But if the new rules turn out bad, decamping to its main growth market would make sense.

Aviva manages euro zone dependence – for now

8 Mar 2012

A third of the UK insurer’s sales come from continental Europe. In 2011 it managed the slowdown sufficiently to repair its capital base and boost its dividend. But Europe’s woes are not yet over. And regulatory reforms could yet undermine Euro-focused insurers’ business models.

Fondiaria saga recalls Italian power-broker heyday

6 Mar 2012

The struggling Italian insurer’s investors have to choose between merging with rival Unipol and a private equity offer led by ex-Capitalia chief Matteo Arpe. Both carry risks. But the benefits of the Unipol deal in particular look skewed to power-brokers rather than shareholders.

April Fool’s comes early to comical M&A market

6 Feb 2012

It’s hard not to smirk at America’s largest title insurer buying steak chain O’Charley’s. Not only does it sound like a bad joke, it defies conventional wisdom both on conglomerates and the use of premium proceeds. But for idle bankers, even oddball deals are no laughing matter.