Insurance

AIG should have been nationalised

11 Nov 2008

The upsized $150bn bailout has a better structure, but it will bring taxpayers less loan interest, reduced protection and the same 80% interest in the insurer. That stake keeps AIG off the US government's books. But that convenience is a bad reason to shortchange taxpayers.

AIG mess is Exhibit A in case for better rules

10 Nov 2008

The insurance giant s new $150bn bailout is bigger and looks easier on AIG. The package is better defined than before, but the increased size is embarrassing for the Fed and the Treasury. It underlines the need for regulation that catches any group that s too big to fail.

Allianz pays the final price for Dresdner

10 Nov 2008

Europe s largest insurer was dragged down to a third quarter loss by its last figures from the nowsold bank. Its E2.6bn loss would have been even larger without accounting changes. But the insurance and asset management businesses are suffering too expect more poor results.

Swiss Re bends before hurricanes

4 Nov 2008

Financial storms hit the world s biggest reinsurer hard, bringing $2.4bn of investment losses so far this year. Add in more traditional hurricane claims, and Swiss Re reported its first quarterly loss in six years. Bad weather is set to continue, but Swiss Re is well protected.

Financial scavengers begin to flex their cheque books

4 Nov 2008

Buyout firms are raising cash to snap up juicy insurance, pension and asset management titbits. It shows there s capital available and that the bottomfishing season is open. But private investors ability to help pension providers keep their expensive promises is limited.

ING gets sucked into capital fears vortex

17 Oct 2008

Shares of the Dutch bank and insurance group tumbled 27% on worries it needed to raise more capital. ING has a good profile on funding, the source of much of the panic in recent weeks. But as others rush to add capital, the dawdlers are being targeted.

Insurers not indemnified against market woes

16 Oct 2008

Until AIG blew, the sector had hidden quietly in the corner. Now, the hits are coming quick and fast. As large buyers of structured products, insurers pain was predictable. Luckily, they are less prone to the liquidity concerns hammering the rest of Wall Street.

European insurers not in the same boat as banks

15 Oct 2008

Stock markets have fallen and the risk of corporate bond defaults is rising. Investors are nervous about insurers capital position. But most look strong enough to resist a recession. If some have to raise capital, it is more likely to be from private than government sources.

Fed’s AIG rescue protections look illusory

13 Oct 2008

The US government lent $85bn to AIG and demanded the right to own 80% of its stock. Then it promised the insurance giant $38bn more. The rescue structure was supposed to spare taxpayers downside and give them upside. On this scale, it doesn't work like that.

AIG’s new Fed debt may leave little for shareholders

6 Oct 2008

It has returned to the central bank s trough for another $38bn. That may let it live to fight another day. But a breakingviews analysis reveals that the new debt on top of the $85bn it hopes to pay down with proceeds from asset sales may mop up the last of its value.

New York’s credit derivatives plan is flawed

23 Sep 2008

The state wants its insurance watchdogs to oversee CDS. Proper marketwide clearing mechanisms which are in the works would do that more effectively. The New York plan could disrupt credit markets at the worst possible time, and push business out of the state.

Greenberg shouldn’t get a second crack at AIG

16 Sep 2008

The octogenarian, who left the insurance giant in 2005, didn t orchestrate its plunge into the worst of its toxic exposures. But the business still largely the giant he created over decades is being tested and found wanting. He should stay in AIG's past.

AIG is moral hazard writ gigantic

16 Sep 2008

Without the bailout, markets and some more tangible victims would have taken another big blow. But now every other struggling US company will queue up for a handout. And taxpayers cash will probably never be recouped.

Pimco’s Gross plays prophet for profit

10 Sep 2008

Bill Gross, the muchquoted managing director of bond fund giant Pimco, made a killing on the US government s bailout of Fannie Mae and Freddie Mac. His positioning was spot on, but calls for the Treasury to step in were less about doing the right thing than talking his book.

Friends looks a bad bet for Cowdery

4 Sep 2008

The UK insurer s investors may welcome renewed interest from the entrepreneur the moribund stock price has perked up. But Friends looks cheap because it has problems. Breaking up the company and selling the unwanted parts would be tricky. It s a deal Cowdery should avoid.

Bancassurance defies mortality forecasts

1 Sep 2008

Allianz wanted to keep a distribution channel for insurance products when it sold Dresdner Bank to Commerzbank. The German insurer and Commerz believe that the deal will help boost insurance sales. Bancassurance doesn t flourish everywhere, but it is stubbornly alive.

Too much milk spilt at Parmalat

21 Jul 2008

Unicredit s expected E300m settlement shines a spotlight on hidden value at the scandalhit milk and cookies company. Parmalat s share price is factoring in precious little for pending suits against Citi, Bank of America and Grant Thornton.

UK insurers should sort out surplus assets mess

1 Jul 2008

Hopes for a solution to this longdrawn out problem have been dashed after the Prudential abandoned a scheme to sort out the use of funds that companies retain, supposedly to smooth out returns. This shillyshallying isn't good enough. The regulator should crunch heads together.

AIG’s mis-steps should put CEO in hot seat

22 May 2008

Martin Sullivan has presided over damage including huge shock losses and a big accounting misstep. Some blame his imperious predecessor, Hank Greenberg. But if Chuck Prince had to quit despite Sandy Weill s troubled legacy at Citigroup, should Sullivan get off the hook?

Buffett’s dislike of auctions trims RBS’ shortlist

15 May 2008

His Berkshire Hathaway vehicle apparently isn t bidding for RBS Insurance after all. That takes a big cash buyer off the supposed shortlist of eight bidders. Not all the others are credible either, so RBS might yet have to work hard to extract a decent price for the unit.