Insurance

Italy better off with Geronzi-less Generali

6 Apr 2011

The Italian insurer's chairman has been forced out by his own board. That's good for Generali, which was descending into civil war. But the ousting of the archpower broker is also good for Italy: it could signal a key moment in the evolution of its duff corporate governance.

Woodstock of capitalism just turned into Altamont

31 Mar 2011

At Berkshire Hathaway's April 30 annual meeting in Omaha, Warren Buffett will take queries from a trio of journalists. Without being too presumptuous, Breakingviews suggests a few he must answer to assuage concerns about succession, ethics and, well, whether he's lost his mojo.

Bond insurance zombie MBIA isn’t dead yet

25 Mar 2011

That's small consolation to Warburg Pincus, which pumped in funds as the crisis torpedoed the whole industry. If MBIA, with claims possibly climbing over $20 bln, can fend off a lawsuit by banks challenging its split, there might be hope for the investment but not the business.

Ping An’s too-clever financing may backfire

24 Mar 2011

The Chinese insurer's $2.5 billion placement to a single tycoon raised capital quickly, and helped it save tax. But selling at a discount negates the savings, and investors aren't happy. The falling share price shows bending the norms may not pay.

Insurers should withstand earthquake shock

14 Mar 2011

Estimates of insurance losses of $35 billion may prove conservative, but still fall short of other disasters like Hurricane Katrina. Yet the sector is well capitalised, and providers have learned from past catastrophes. Big claims can turn the cycle towards higher profitability.

Imagine Berkshire Hathaway as a hedge fund

28 Feb 2011

Warren Buffett is finding it harder to beat the market while Omaha's charms aren't getting any more appealing to potential successors. It might be heresy to contemplate a 2and20like fee structure, but rewards matter. Moreover, Berkshire shareholders might still do very well.

AIA just about deserves its lofty valuation

25 Feb 2011

The Asian insurer is throwing off cash, and grew earnings by 54 pct in 2010. But it could do better at winning new business. AIA's premium valuation rests on new CEO Mark Tucker applying the skill and aggression he previously showed when building Prudential's business in Asia.

Twist at Generali offers hope for Italian business

24 Feb 2011

A rebel board member has pushed the Italian insurer into saying it will retain cross shareholdings only if they make financial sense. It's a blow for chairman and power broker Cesare Geronzi but a welcome challenge to cosy ties in Italian business that harm shareholder value.

European property needs more bank wannabes

6 Jan 2011

Axa has set up funds to invest 2.5 bln euros in real estate debt. The move suggests insurers could help ease the 450 bln euro refinancing burden left by Europe's shrinking banks. Many of these loans will be deemed too risky. But the French group may point the way for others.

UK insurers embrace accounting dark ages

5 Jan 2011

European insurers committed to new accounting measures in 2008 to make them easier to compare. Now UK life insurers are doing a Uturn. The new reporting regime may have been flawed. But if so, insurers should fix it rather than turn their backs on better disclosure.

AXA finally squares circle with Asia minorities

15 Nov 2010

The French insurer is offering $13 billion to buy out its Asian unit at the third attempt. It reverted to its first partner, AMP, after the second, NAB, was blocked by regulators. The deal has been almost a year in the making, but minorities are finally getting a good price.

Pru chairman is still on the rack

10 Nov 2010

Healthy Q3 results from Prudential, driven by the UK insurer's Asian business, leave CEO Tidjane Thiam looking increasingly secure. But someone must still take responsibility for the botched attempt to buy AIA earlier in the year. Step forward chairman Harvey McGrath.

AIA surge offers some consolation to Prudential

29 Oct 2010

Following a firstday pop, the Asian insurer is now worth as much as its UK rival's failed bid in March. Pru's management may feel vindicated, though a deal would have faced integration and regulatory risks. At least AIA's success will help lift the value of Pru's own Asian arm.

AIA gets first taste of freedom in $31 bln IPO

22 Oct 2010

The insurer priced at the top of the range, giving parent AIG the chance to pay back bailout debts, while retaining a 33 pct stake offering possible upside. AIG, AIA's new boss and lead manager Goldman Sachs all had something to prove. Their relief will be palpable.

AIA’s $30 billion IPO is sensibly priced to go

4 Oct 2010

The Asian insurer's topend valuation will be slightly higher than the offer from UK Prudential it rejected in June. Though the price looks unchallenging relative to Asian peers, owner AIG will keep half of the stock for at least a year. Leaving some cash on the table is smart.

Pru’s chairman should not be allowed off the hook

30 Sep 2010

The UK insurer is looking to add city bigwig Paul Manduca to its board, potentially as senior independent director. After Pru's failed AIA bid, new board members are vital. But unless Manduca's task is to identify a new chairman, the reshuffle won't go far enough.

Pru’s putative Chinese suitors face hurdles

14 Sep 2010

Reports of a Chineseled breakup bid boosted the UK group's shares. But pulling it off won't be easy. Offloading U.S. and UK divisions at an attractive price is one obstacle. Getting domestic financing is another, especially with a competing opportunity of AIA's public offering.

EU timidly moves towards better banking regulation

3 Sep 2010

European Union bodies have finally reached a compromise on the new financial regulatory framework suggested by the Larosière report eighteen months ago. The new panEuropean bodies will lack a full set of teeth, but they might still be able to help in times of crisis.

RSA may struggle to find common ground with Aviva

18 Aug 2010

The UK insurer's 5 bln stg offer for its rival's general insurance assets has been dismissed as too low. Aviva's capital structure means it would need a higher price to justify a sale. But RSA has limited scope to raise its equityfunded deal without undermining its own returns.

Aviva must justify keeping general insurance arm

16 Aug 2010

The UK insurer has rebuffed a 5 billion stg approach for its subsidiary from rival RSA. The offer looks on the low end, and Aviva claims that its diversified approach brings benefits. But it will need to persuade shareholders these are worth more than a sale.