Insurance

ING should further carve up Asian insurance sale

23 Jan 2012

The Dutch bancassurer has already separated out the disposal of its Asian insurance arm from its European operations. But potential acquirers are not all interested in the same bits. To maximize value, ING might be better off breaking the sale into still smaller parts.

Unipol’s latest empire-building looks a stretch

18 Jan 2012

The Italian insurer’s attempted takeover of BNL in 2006 was a fiasco. An ambitious four-way merger to create a rival to Generali makes greater financial and commercial sense. But the plan still requires jittery shareholders to support a huge capital hike.

Delphi slips Tokio Marine a $2.7 bln spiked cocktail

21 Dec 2011

That’s one explanation for the Japanese insurer’s Godzilla-sized overpayment for the U.S. group. Including a special dividend, it’s paying a near 80 pct premium. It’s another example of Japan Inc throwing shareholders under the bus in the name of international expansion.

Pru’s AIA mess finally claims deserved scalp

20 Dec 2011

The UK insurer’s chairman, Harvey McGrath, says he is to retire, 18 months after the badly handled bid for Asia’s AIA. It’s a shame there’s no replacement yet. But Pru won’t struggle to find one. And the board has shown accountability while avoiding a disorderly transition.

Morgan Stanley housecleaning will please Basel

13 Dec 2011

Chief Executive James Gorman’s settlement with bond insurer MBIA puts a big chunk of the financial crisis legacy behind the firm. At $1.8 bln it doesn’t come cheap. But it puts Morgan Stanley on the right track by boosting regulatory capital and tidies up a very messy year.

Indian privatisations need time, and hard work

10 Nov 2011

Practical problems often come with moves that are sound in principle. Indian authorities are mulling the part privatisation of four general insurers. As with many other state-owned assets, there’s a tonne of preparatory work to be done before the firms can contemplate a float.

U.S. courts make death arbitrage a tougher game

26 Sep 2011

Cashing out life insurance can keep a policyholder afloat if he suddenly needs the cash. But an active secondary market tempts some to buy insurance just to sell the policy on. Delaware judges have wisely made such ghoulish bets on life expectancy easier for insurers to kill.

Google’s $12.5bln insurance buy may worry partners

15 Aug 2011

Paying up for Motorola Mobility locks in patents to help ensure Apple and Microsoft can’t stifle Google’s Android mobile operating system. But the search giant’s plans for its new hardware company will be the key concern for regulators and current Android handset makers alike.

Sweeter PR not enough to revitalize M&A deal

1 Aug 2011

U.S. reinsurer Validus may hope that by switching flacks in the heat of battle it can persuade its shareholders to like the bid for $3.2 bln rival Transatlantic they have so far scorned. But messaging doesn’t win deals, numbers do. On that score, Validus isn’t far enough ahead.

Insurers get euro stress tests off to a duff start

5 Jul 2011

A tenth of Europe's insurance companies have flunked this year's stress test, though the regulator won't name them. The tests were based on rules that don't take force until 2013. But they also weren't tough enough. European authorities would have been better off doing nothing.

Carlyle’s RAC buy points to racier use of debt

23 Jun 2011

The U.S.based investor bagged Britain's numbertwo roadside recovery firm despite using a slimmer debt package than rival bidders. But the auction highlights how leverage for European buyouts is shifting up a gear encouraging private equity firms to pay everricher prices.

Vote on Pru chairman makes his position untenable

19 May 2011

Nearly a quarter of shares in Prudential, the UK insurer, voted against the reappointment of Harvey McGrath as chairman. He is being held responsible for last year's botched AIA deal. Though it is a minority vote, McGrath should heed the clarity of the message, and walk.

Bank mis-selling charges point to Lloyds misdeeds

9 May 2011

Compensating UK customers who were missold payment protection insurance will cost Barclays and HSBC 1.3 bln pounds. That's less than half the hit taken by rival Lloyds. Even allowing for differences in market share and product mix, the gap suggests Lloyds has more to answer for.

Buffett inadvertently nails it evoking Salomon

30 Apr 2011

The Oracle of Omaha compared David Sokol's Lubrizol dealing to the scandal that rocked the Wall Street firm he partly owned 20 years ago. He described both as inexcusable and inexplicable. The link Buffett missed is that rogue trading at Salomon Bros exposed poor controls.

Buffett bungle restores a bit of M&A banker cred

28 Apr 2011

Bankers routinely seek credit for transactions on which they do squat. But Berkshire's David Sokol understated Citi's role in arranging the Lubrizol takeover. Given his exboss's views on bankers, it's the last place where Wall Street could have expected inadvertent image help.

Generali affair shows why Italy underperforms

27 Apr 2011

The seemingly lavish expenses and hefty payoff for Cesare Geronzi, the insurer's former chairman, give a glimpse of the complex tradeoffs that bedevil Italian corporate and political life. To pep up its lacklustre economy, Italy needs companies to start working for shareholders.

Berkshire board tries cleaning up Buffett’s mess

27 Apr 2011

The audit committee has taken a much tougher stance than the Oracle of Omaha on the Lubrizol shares scandal involving onetime heir apparent David Sokol. The latest assessment is sager and should help restore confidence in Berkshire. But Buffett is left looking incredibly naïve.

Pru/AIA shambles comes under welcome scrutiny

21 Apr 2011

The UK financial watchdog is probing Prudential's failed bid for Asian rival AIA. The ambitious deal was badly communicated and suffered hitches with regulatory approval. Pru, a worldclass institution, had top investment banks advising. A year on, questions still need answering.

Lubrizol provides smoking gun on the Sokol scandal

12 Apr 2011

The group added 30 words to a proxy filing to say its bankers at Citi informed the former Berkshire executive that its board would meet to discuss a possible deal. He then bought $10 mln of stock. Warren Buffett's contention that David Sokol did nothing wrong doesn't look right.

Geronzi’s 17 million euro pay-off sticks in craw

7 Apr 2011

Generali's exchairman undermined his chief executive and alienated board members. To force him out, the Italian insurer has now given him 1.5 million euros for each month he was in this post. This is an astonishing payment for being a nuisance.