Insurance

Friends Provident deal looks good for Resolution boss

25 Jul 2007

Clive Cowdery gets the top job in this £9bn merger of equals. And his CEO, Mike Biggs ends up as number two. Cowdery sacrifices Resolution's name, but there's not as much left to resolve. The deal ends his original model of buying closedlife books.

Resolution and Friends plan sensible £8bn merger

23 Jul 2007

The two UK life insurers are roughly the same size and have opposite problems too much capital in Resolution and too little at Friends. Also, Resolution s model of buying cheap assets has lived out its brief life. So a planned merger is a natural if no one else breaks in.

Allianz outsmarted by market in E10bn AGF offer

18 Jan 2007

The German insurer's delay in buying full control of its French subsidiary has led to AGF's share price rocketing. What's more, the current offer may not even win. That said, it still makes sense. Integrating AGF should free some capital and trim costs.

Macquarie lightens the leverage in Techem bid

16 Nov 2006

That s counterintuitive. Don t financial investors usually gear targets up to the hilt to boost returns? True. But there can be legal problems doing this with German companies. So it may be smarter to inject more equity upfront.

Lloyds will want more than £8bn for Scottish Widows

16 Oct 2006

That might have been enough to tempt the UK bank while its life arm was struggling. But it looks stingy now Widows is pulling its weight. It s a lower multiple of embedded value than other life businesses are on. And by cutting profits, a deal may put Lloyds dividend at risk.

Pension buyouts: where are the customers?

5 Oct 2006

Edmund Truell has joined a crowded field of insurers looking to buy up corporate pension liabilities. But so far, there are few takers. That s not surprising, because the cost remains really high. The bet is that regulatory pressure will force companies to insure themselves.

Aviva sweetens the pill on $2.9bn AmerUs deal

13 Jul 2006

A betterthanexpected trading update and lowerthanexpected price may ease some worries about the UK insurer s US buy. But it s still hard to get very bullish about a deal that gives Aviva no more than a toehold in a huge, highly competitive market.

Standard Life squeezes institutions in £4.7bn IPO

10 Jul 2006

The UK insurer made a success of the offering by encouraging members not to sell but buy new shares. That limited supply to institutions. Retail investors were right to stay in on this occasion. Standard Life looks a good value play with inbuilt defensive characteristics.

Aviva looks to US for growth

7 Jul 2006

Since its failed bid for Prudential, it has been clear Aviva needed a deal to spur growth. But its $3bn approach for AmerUs is uninspiring. It looks like an itsybitsy deal not a transforming move. And it could be costly if competition emerges.

Standard Life needs to kick mutual habit

4 Jul 2006

The Edinburghbased insurer has become more rational about how it allocates its capital. But its cost base is still too high. This has cost its policyholders. That leaves some upside for incoming investors, if they can persuade management to change.

Credit Suisse exits Winterthur cleanly for E7.9bn

14 Jun 2006

With the sale of its insurance arm to Axa, the Swiss bank has drawn a line under the disastrous dealmaking of former boss Lukas Muehlemann. But it can t claim revenge on Axa for selling it DLJ in 2000. The deal looks sound if strategically unexciting for the French.

Resolution’s Abbey purchase whets its appetite for deals

7 Jun 2006

With targets getting more expensive, and Resolution s chairman Clive Cowdrey on the prowl, that may reflect an acquisition discount. Investors are warming to the closed book specialist s purchase of Abbey life businesses. But they are still leaving a margin for error.

Resolution chases another audacious deal

3 May 2006

The insurance group only recently failed to buy Standard Life. Now it is trying to buy another larger entity Abbey s life business. Why is it being so aggressive? Simple. Its mission is to roll up unwanted UK life businesses. To do that it needs to stay ahead of rivals.

Standard Life shares are a speculative bet

18 Apr 2006

The UK insurer aims to float at a sizeable discount to European peers. Even so, it may not be the bargain it looks. Its recovery remains a work in progress. And a takeover at a meaningful premium may prove elusive.

FSA steps up pressure on hedge funds

23 Mar 2006

The regulator is worried about inaccurate reporting of fund valuations and side letters giving preferential liquidity to larger investors. Fortunately the FSA is not suggesting extra regulation. But it may be looking to claim scalps to prove it is on top of the problem.

Investors shouldn’t dismiss Aviva’s Pru bid

19 Mar 2006

It may seem pretty mean. The UK insurer is only offering a 10% premium to its rival's share price. But the real scope for value creation in this deal comes from a stock market revaluation of the combined business.

Idea of transatlantic bid for ZFS is ridiculous

17 Mar 2006

The market has lapped up suggestions that St Paul Travelers of the US might buy the Swiss insurer. But the financial and strategic merits of the idea are dubious to say the least. ZFS is more likely to buy than be bought.

Allianz deserves benefit of the doubt

16 Mar 2006

The German insurer s fourthquarter results have slightly disappointed an optimistic market. But management remains resolute in its belief that it can deliver on its threeyear plan. And the strategy behind the plan is credible.

Generali’s strategic plan radical but believable

6 Mar 2006

The Italian insurer is at last addressing its flabby balance sheet gearing up to buy out minorities and launch a buyback. Investors may be sceptical of plans to reap groupwide synergies, and hints of M&A. But management s track record should give confidence.

Skandia rout is warning to hostile bid targets

10 Feb 2006

Staterun pension funds and domestic retail investors have reversed their longstanding opposition to Old Mutual s hostile takeover bid. A squeezeout of minorities looks likely. Old Mutual pitched its offer to get a simple majority. Hostile bids are getting harder to defend.