Insurance

Pru cash-call is legacy of overambitious strategy

22 Oct 2004

Under CEO Jonathan Bloomer, Prudential s empire has grown at an impressive pace. But this month's surprise rights issue suggests that the strategy was too great a stretch for the UK insurer's capital base.

Pru’s £1bn rights lacks credibility

19 Oct 2004

It s hard to take seriously the insurer s stated reasons: funding UK growth and meeting new solvency requirements. The Pru itself said the UK was dull just months ago, and the solvency regime is hardly news. It looks as if it s filling an Eggshaped hole.

Generali’s H1 profits smash forecasts

9 Sep 2004

And for the right reasons. The Italian insurer has shown improved premium income growth and underwriting efficiency. Generali is now well ahead in delivering on its threeyear plan. But that doesn t mean it will enjoy a premium rating any time soon.

Allianz boss sets good example on pay

17 Aug 2004

Michael Diekmann has revealed a fixed salary of E900,000. That seems small, but he could earn a lot more in bonuses. Other German companies should follow suit. This would encourage greater transparency and avoid onerous legislation. Michael Diekmann, the boss of Germany's largest insurer, has disclosed his salary. But Allianz has not revealed his bonus and options. Allianz should disclose the total sum and other German companies should follow suit. This would avoid onerous legislation.

Allianz investors unmoved by Dresdner recovery

16 Aug 2004

The German insurer s shares are down 25% this year even though its banking unit has returned to profit. Why the cool response? One reason may be that Dresdner s recovery is weedy. Another is that the rest of Allianz is only doing all right.

Converium’s credibility sinks as fast as its stock

20 Jul 2004

The Swiss reinsurer is upping its reserves again US casualty claims yet again. Rivals nailed this problem several years ago. Converium's management and shares are limping. The snag for investors is that it may be too small to be attractive to a bidder.

Pru CEO enters tricky period

11 Jul 2004

All things being equal, a drawnout auction wouldn t damage CEO Jonathan Bloomer since the bank is a small disposal for the UK insurer. But all things aren t equal. Bloomer s credibility was already low before the auction began. This week will be six months since Jonathan Bloomer revealed the UK insurer had put online bank egg up for auction. Bloomer s credibility was low in January. While the deal is relatively small, protracted negotiations will fuel mutterings about his future.

Standard Life’s UK pension sales take a dive in H1

1 Jul 2004

The proposed flotation may be two years away, but that's not long to reinvent the whole company by allocating capital to better markets. The life insurer s spat with the regulators has had a hugely damaging impact on the core business. The life insurer s public spat with the regulator has damaged its core UK personal pensions business. Annualised sales now match those of rival Legal & General. But this doesn t mean Standard Life should float at L&G s £6bn valuation.

Munich Re declares itself turned around

3 Jun 2004

That may be jumping the gun. But at least Munich Re is acknowledging its business needed a good kick. Its commitment to driving profitability shows it's prepared to let the concerns of investors and rating agencies influence its thinking.

GE finds making bankers sweat doesn’t always pay

2 Jun 2004

The giant conglomerate held Goldman Sachs and Morgan Stanley s feet to the fire over the IPO of its insurance unit. The result was less than a wholehearted success.

Swiss Life opts for huge discount in rights offer

18 May 2004

The company is pressing on with its share and convertible offer even though sentiment towards insurers has turned nasty. It's not so financially stressed that it couldn't have postponed the job. But management probably couldn't bear to be seen in retreat.

Dresdner stops losing money

14 May 2004

But Allianz s illfated banking acquisition is a long way from making a decent return on equity. Going forward, it may be just as hard to jack up profits at the shrunken unit as it was to stop the losses.

Standard Life looks a tough sell

31 Mar 2004

Europe's biggest mutual insurer is right to opt for a demutualisation. But in its current shape it will struggle to attract investors. The twoyear flotation timetable should give it time to reinvent itself if a bid does not put policyholders out of their misery first.

Swiss Life goes cap in hand for another SFr1.2bn

30 Mar 2004

The group's insurance subsidiary has not had success in selling its Banca del Gottardo. So it is selling the bank to the holding company. This is only an excuse for a third capital increase in two years.

Another disappointment from Prudential

24 Feb 2004

The formerly solid performance of the UK insurer has become much harder to rely on. Its latest results have been hit by the falling dollar. But CEO Jonathan Bloomer is hesitant to take advantage of the weak dollar by making acquisitions in the US. He should not be so cautious.

Standard Life liquidates 25% of with-profits fund

18 Feb 2004

Europe's largest mutual insurer sold some £8bn of equities in the last few weeks, boosting its solvency ratios. Market conditions were ideal for such a move. Unfortunately for Standard Life, it cannot take all the credit for the timing of the decision.

Sampo torches E2.7bn IPO plan

11 Feb 2004

The Finnish financial services group was all set to reduce its stake in If, a general insurance firm, along with coshareholders in a float. But it has staged a uturn and bought out the consortium instead. It could be gambling on there being better conditions for an IPO later on.

Axa convertible investors fret over Mony

27 Jan 2004

Shareholders in Mony are becoming increasingly aggressive in their opposition to Axa s recommended offer for the US insurer. That s making investors who bought a special Axa bond to finance the offer worry that it may have to pull out. Such fears look misplaced.

Standard Life admits to demutualisation plan

13 Jan 2004

The mutual insurer has all but announced it is heading for a float that could value it at up to £7bn. It has even appointed a new chief. The UK regulator, which has exposed the fact that its capital isn't as strong as once thought, has effectively forced the move.

Standard Life under scrutiny over solvency

8 Jan 2004

A dispute between the giant mutual insurer and the UK regulator has been exposed. The issue, solvency, couldn t be more serious. That could give ammunition to the dogged moves by some policyholders to get it to sell up.