AXA outsources upside to Mario Draghi 21 Jun 2016 The French insurer’s new five-year strategy expects annual earnings growth of 8 percent. If rates don’t rise, however, that will be more like 3 percent. Unless the ECB can gee up the euro zone economy, matching assets with liabilities will remain a struggle for all insurers.
Thaihot’s $1.4 bln HK insurance deal looks fiery 3 Jun 2016 The little-known Chinese group has paid almost double recent valuations for local bank Dah Sing's insurance unit after a fierce auction. The deal is part of a drive to diversify from property. But China's currency controls may interfere with efforts to attract mainland customers.
Egos may kill $54 bln health deal before watchdogs 23 May 2016 Cigna and Anthem haven’t consummated their merger, yet the U.S. insurers are squabbling over a lawsuit, information sharing and executives’ roles. The disharmony could make the deal fall apart. At the very least, it will make it harder to push it past antitrust regulators.
Credit Suisse labours to spin misfortune into gold 20 May 2016 A bond that wipes out if the Swiss bank encounters big operational losses, from rogue trades to cyber crime, has not been an easy sell. Even for investors who specialise in natural catastrophes, this product is esoteric. Such cleverness is impressive, but unlikely to catch on.
Aegon mixes short-term pain, long-term plain 12 May 2016 The Dutch insurer saw its capital position fall after changes to its hedging strategy led to a 50 pct year-on-year fall in earnings. New solvency rules mean capital ratios will move about more. That’s not great when markets are volatile too.
MetLife’s SIFI label doomed by D.C. double-talk 7 Apr 2016 A U.S. judge tossed the insurer’s designation as a systemically important financial institution because a regulator couldn’t keep its story straight. FSOC said it both had and hadn’t changed its rules, prompting a decision that it acted arbitrarily. An appeal will be tough to win.
Inflation insurance is new U.S. fad 5 Apr 2016 Investors have a new-found appetite to buy American bonds offering protection against price rises. U.S. inflation is finally ticking up and could overshoot the Fed’s 2 pct target. With Europe showing no such signs, though, the fashion won’t cross the Atlantic any time soon.
GE Capital shows systemic tagging is working 31 Mar 2016 GE’s finance unit wants the U.S. to end its too-big-to-fail designation now that it has slashed size and risk. MetLife, which a court just freed from its label, had initiated a breakup. Even big banks have trimmed a bit. SIFI-dom’s burdens may be achieving what lawmakers wanted.
MetLife SIFI heroics give Uncle Sam a headache 30 Mar 2016 The insurer has won its battle to overturn its designation as a systemically important financial firm. CEO Steve Kandarian is now the toast of Wall Street, even if few can emulate him. It’s a big defeat for regulator FSOC, though, which is also facing attacks on other fronts.
In China, life insurance doesn’t last a lifetime 22 Mar 2016 Customers have piled into policies that let them cash out early while pocketing high returns. The need to attract punters is forcing insurers to buy riskier assets. Now regulators are reining in the practice. The crackdown should make the industry safer, but also less profitable.
Marriott’s Starwood deal suffers China syndrome 21 Mar 2016 To trump an interloping bid from Beijing’s Anbang, Marriott raised its offer for its hotelier rival to $13.6 bln. Even with more cost cuts, the math suggests significant value destruction. Anbang may have reasons to pay up, but Western buyers can’t be so careless of shareholders.
AXA stalwart would be partial fix for HSBC 21 Mar 2016 The UK bank already said it will choose an outsider as its next chair. Board member Henri de Castries, stepping down at French insurer AXA, fits the bill. Ideally though, HSBC would pick someone who hadn’t committed the governance no-no of simultaneously being chairman and CEO.
L&G falls victim to bank-style capital envy 15 Mar 2016 The UK insurer met forecasts and hiked its dividend for 2015. But investors seem concerned that L&G’s position under the incoming Solvency II capital regime is relatively weak. It may be unfair, but as banks have found to their cost, capital adequacy tends to be a race to the top.
Hotel spree sates China’s taste for overseas glitz 14 Mar 2016 Foreign hotels are becoming corporate China’s trophy assets of choice. Buyers want to reduce their exposure to a slowing domestic market and capture the growing flow of overseas tourist dollars. Anbang Insurance’s mooted $6.5 bln takeover of Strategic Hotels won’t be the last.
Old Mutual splits for good reason: it can 11 Mar 2016 The Anglo-South African financials group is breaking into four. It has that rare combination of businesses that don’t go together, a boss willing to empire-shrink rather than build, and potential hidden value. Other groups have the same problem, but lack a clear way to fix it.
Best U.S. health-insurance merger may be none 10 Mar 2016 UnitedHealth’s four main rivals are fighting to push their deals past state and federal regulators. The $115 bln UnitedHealth will look smart if the mergers, each worth about $70 bln in current combined market value, are blocked. It might even win out if the deals pass muster.
Aviva investors upgrade Friends deal to so-so 10 Mar 2016 The UK insurer has said it will deliver hoped-for synergies from its late-2014 deal to buy Friends Life a year early. Its capital position is greatly improved. But a minus 12 pct total return since the deal broke implies shareholders are still waiting to be convinced.
Old Mutual carve-up a question of when, not if 7 Mar 2016 The UK group has always looked a weird mix of British wealth manager, U.S. asset manager and African financials arm. Old Mutual is now considering a breakup. The big question is whether South Africa’s troubles are reason to push ahead or wait.
AIA offers timely antidote to Asian worries 25 Feb 2016 The insurer’s net operating profit jumped 10 pct in 2015 despite slower economic growth and volatile equity and currency markets. The group has deep demographic trends on its side. A 50 pct dividend hike should provide further reassurance to skittish investors.
Delta Lloyd sweetens investors’ bitter pill 24 Feb 2016 The Dutch insurer plans to raise only 650 mln euros through a rights issue, rather than the 1 bln euros many shareholders feared. If the firm can pull that off, its solvency headache will be eased. But owners are still being asked to cough up over half the value of the company.