Insurance

AIG’s derivatives janitors need a new pay scheme

26 Mar 2009

Many at the insurer s financial products arm have given back 2008 bonuses. But amazingly, they re in line for another $161m for 2009. A better deal for taxpayers would see these renegotiated at a hefty discount and paid monthly for as long as it takes to mop up the $1.6tr mess.

AIG backlash could endanger global economy

20 Mar 2009

Outrage over the $165m bonuses has turned financiers into devils and further undermined Geithner s credibility. That will make it harder for Obama to ask Congress for more funding to bail out banks. But until US banks are shored up, the whole global economy will feel wobbly.

Liddy needs to open up to taxpayers

18 Mar 2009

AIG s CEO is under fire for paying out retention bonuses. The public outrage means future bailout funds could be at risk. Taxpayers already own 80% of AIG. But Liddy still sounds like a typical cautious company boss. However tough it may be, he must answer to his new owners.

Taxing AIG bonuses would waste time and effort

17 Mar 2009

The payouts rightly raise popular and political ire. But one idea for redress loading tax on recipients risks the same damaging fallout as breaking the contracts: uncertainty. Besides, they're a historical distraction. US lawmakers have more than enough to do for the future.

No need for European banks to say sorry about AIG

16 Mar 2009

NonUS banks have received $60bn from AIG in the costliest bailout in history. US taxpayers may not be happy about helping foreigners, but the banks got no more than their contractual due. That s how bailouts should work. There s nothing for the Europeans to feel guilty about.

Obama’s AIG populism undermines his authority

16 Mar 2009

The US president said Tim Geithner should pursue every legal avenue to block bonuses to AIG executives but it seems like Geithner already has. The bonuses stink. But raising doubts over contract commitments and contradicting his officials is unwise. Obama needs to be smarter.

AIG’s disclosure should just be the beginning

16 Mar 2009

The US insurer finally revealed that nearly twothirds of its $180bn bailout cash has already gone, mostly to US and foreign banks. AIG should disclose more, but it s a start. At least annoyed policymakers now have data to inform their critique of the AIG bailout and others.

AIG bonuses stink – but taxpayers must hold noses

15 Mar 2009

Paying $165m in guarantees to employees involved in making AIG a ward of the US government is disgraceful. But the commitments appear binding. Still, the government can name and shame to mitigate the pain, modify behaviour and avoid a firestorm that does more damage than good.

AIG bailouts need a dose of Obama’s openness

6 Mar 2009

Senators want to know which counterparties were made whole thanks to $180bn of government funding. A full explanation could put conspiracy theories to rest. Besides, AIG is effectively owned by taxpayers it's a perfect test of the administration's commitment to transparency.

Aviva capital fears overdone

5 Mar 2009

The insurer held its dividend after ending 2008 with a comfortable capital cushion in spite of savage unrealised investment losses. Its reward? A 30% shareprice drop. That s harsh. Aviva is well diversified, well hedged and can afford the payout.

AIG’s toxic spill still isn’t contained

2 Mar 2009

The insurance giant got less onerous terms on its bailout package and is hiving off businesses. But even as it tries to wind down bad assets, its plans for isolating the financial products division the main source of its $99bn loss in 2008 are still clear as mud.

AIG’s PR army could irk taxpayers

2 Mar 2009

The allbutbankrupt insurance giant employs four public relations firms. Private jets, golf days and lobbying are out for recipients of government rescue funds. Some taxpayers and their representatives in Congress could see PR in the same category.

US needs to get tough with AIG

25 Feb 2009

The insurer always seemed like a black hole. Now hopes for asset sales are fading and the government may be considering swapping debt for shares. Taxpayers look like the losers in the $150bn bailout. Even if AIG is too big to fail, other creditors need to share the pain.

Generali’s Alleanza deal may signal new ambition

24 Feb 2009

The Italian insurer is buying out minorities in Alleanza for a small premium. The deal mildly dilutes Generali s top shareholder, investment bank Mediobanca. It also bodes ill for Intesa Sanpaolo's joint venture with the insurer. Stalled Generali seems to be getting back in gear.

AIG looks like Geithner’s next big headache

23 Feb 2009

The struggling insurer could report a $60bn loss, and need a new load of US government support. Geithner was involved in the original bailout. He probably won t pull the plug now, for fear of risking another market meltdown. Expect more cash to disappear into this money pit.

FSA looks wary of forcing insurance rights issues

17 Feb 2009

A plunging share price has bounced Legal & General into early disclosure of moves to strengthen its reserves. The UK life insurer is preparing to withstand a savage recession. But the absence of a rights issue suggests that the regulator for one is comfortable.

Swiss Re needs more radical change

12 Feb 2009

Jacques Aigrain has quit as chief executive of the troubled insurance group. He had lost all credibility. But his deputy associated with Aigrain s failed strategy is replacing him. The reinsurer needs a more substantial change. An overhaul of the entire board is in order.

Buffett squeezes a discredited Swiss Re

5 Feb 2009

The guru investor has secured cute terms for injecting SFr3bn into the Swiss reinsurer after shock losses. No wonder he is content to champion its management. But shareholders, who face a rights issue, shouldn t share Buffett s faith in executives who spring nasty surprises.

Dutch bad bank tries to outfox markets

3 Feb 2009

The government is insuring E30bn of ING mortgage assets at a premium to their market values. It looks like a hairy transfer of risk to taxpayers. At least the government obtained independent due diligence. The scheme is clearly appealing to shareholders, but is not easy to copy.

Swiss Life looks a little dead

12 Nov 2008

The insurer is heading for a fullyear loss. Premiums fell 11% in the third quarter and market turmoil since then has wreaked more havoc with hedge fund and bond portfolios. Only a retreat from marktomarket accounting has kept the solvency ratio from looking dangerously low.