Aviva pays high price for Friends leak 24 Nov 2014 A fall in the UK insurer’s shares has cut the value of its possible paper offer for domestic peer Friends Life. The premium is now well below the 15 pct first mooted. Forced early disclosure means Aviva has to set out the key strategic and financial details of a tie-up – fast.
Pru’s lesson for investors: trust animal spirits 21 Nov 2014 The UK insurer’s stock hit a record this week, leaving rival Aviva trailing in its wake. It is a painful reminder of how Aviva lost out by failing in its attempt to buy Pru in 2006. The main reason there was no deal? The bidder lacked investor support to pay a fair premium.
Allianz divi hike is bold bet on life after Gross 7 Nov 2014 Europe’s top insurer is raising its payout ratio closer to peers’ and says this year’s dividend is a floor. For now, it’s an affordable signal of confidence that Allianz’s Pimco fund can thrive after the exit of founder Bill Gross. But the policy will be a challenge for the new CEO.
AIG owners’ bailout suit has law and gall on side 29 Sep 2014 Claims Uncle Sam cheated the insurer’s ex-CEO and others while also saving them may actually succeed at trial. Extracting terms like an 80 pct equity stake in exchange for rescuing AIG was legally questionable. Proving damages will be tricky, but never underestimate chutzpah.
Standard Life’s strategic revamp gets timely boost 4 Sep 2014 The UK insurer will return 1.75 bln stg to shareholders after selling its Canadian insurance arm. Standard’s shares had underperformed domestic peers. Offloading a non-core asset at a good price should make investors more cheery about the risks of shifting into asset management.
Risky AA just got riskier 28 Aug 2014 The chief exec and CFO are quitting the breakdown firm two months after the IPO. It may not be a post-float car crash: the market seems to like the show of decisiveness by the chairman, now de facto CEO. But the timing is troubling, as is AA’s rejection of conventional governance.
Pru just shades AIA in battle of Asian insurers 12 Aug 2014 Interim numbers show the UK-domiciled Prudential and its Hong Kong-based peer are both still growing new business at breakneck speed in Asia. AIA generates more cash right now. But the Pru’s geographic mix in the region makes its shares the slightly better long-term bet.
Rob Cox: MetLife CEO should revel in his anonymity 29 Jul 2014 That almost no one knows ol’ so-and-so is good for shareholders. How he handles the mega-insurer’s likely designation as a systemic threat could change that. A Jamie Dimon-style fight would be foolish. Better to speak softly and keep the name Steve Kandarian out of headlines.
Capacity doubt hangs over booming longevity market 7 Jul 2014 The pension scheme of UK telco BT has offloaded 16 bln stg of longevity risk in the largest deal of its kind. Demand is fed by reinsurers. Yet reinsurance capacity will only go so far. Conventional capital markets may have to play a bigger role.
Racy debt makes the AA’s IPO a high-octane bet 12 Jun 2014 The British roadside recovery firm is floating at an enterprise value of 4.3 bln stg. Buyers could get a bargain, but they need to be comfortable with life in the fast lane. Private equity sellers have left the AA towing abnormally large debt.
Benmosche leaves new AIG boss suitably normal job 11 Jun 2014 The colorful CEO bullied, blustered and cajoled his way to a new start for the insurer after its $182 bln bailout. He streamlined AIG, beefed up capital, wound down derivatives and helped Uncle Sam offload its stake at a profit. Successor Peter Hancock has a different challenge.
Japanese insurer pays up for U.S. protection 4 Jun 2014 Dai-ichi Life is spending $5.7 bln in cash on Alabama-based Protective Life. Like many other Japanese acquirers, it’s paying a big premium for minimal synergies. Foreign insurers have struggled in America. But the need to escape a shrinking home market helps justify the risk.
Pimco outflows are wakeup call for Allianz 14 May 2014 The bond fund saw 22 bln euros of net outflows in Q1. Controversy over the role of founder Bill Gross is arguably a big factor. Allianz, Pimco’s parent, suggests it can take the trials in its stride. But its hands-off approach is becoming increasingly hard to justify.
UK investors wake up to asleep-at-the-wheel charge 11 Apr 2014 Disunity is one reason institutional shareholders look drowsy in the face of corporate excesses. Reforms to the way UK-based investors cooperate on governance could make them more alert by setting and enforcing clear standards. The risk is they default to cruise control.
UK authorities show worrying market ignorance 31 Mar 2014 Insurance stocks fluctuated wildly after the government and the regulator each broke price-sensitive news in a clumsy fashion. The failure to anticipate market mayhem betrays poor instincts. It argues for tighter rules around dissemination of news by those that supervise.
UK insurance investors learn to assume the worst 28 Mar 2014 Shares in Britain’s big insurers have fallen sharply on news of a probe into possible mistreatment of some customers. As with recently announced pension reforms, incomplete information has added to the fear. Still, it is possible to rationalise the 4 bln stg hit to market values.
Edward Hadas: In defence of financial coercion 26 Mar 2014 Forcing people into bad economic choices sounds awful, but it can’t be avoided in a complex economy. The right question is not whether to coerce, but who. Savers are getting a bad deal today. Their sacrifice seems to be in vain. The UK’s solution is to coerce a different group.
Standard Life prepares well for tougher times 26 Mar 2014 Shareholders see big benefits in the UK investment group’s agreed purchase of smaller rival Ignis. More was added to the buyer’s market value than it spent on the acquisition. But new rules and expectations for fund managers mean that Standard’s life may not always be this easy.
RSA underwriters can sleep soundly 25 Mar 2014 The insurer’s 773 mln stg cash call has priced at a 33 pct discount to the shares’ theoretical price on completion. That’s narrower than other rights issues. But the underwriters look safe. The deal is small relative to the market cap and RSA has already cut balance-sheet risk.
British insurers trade in damaged market 19 Mar 2014 Usually, governments discuss new policies with everyone concerned. But the UK Treasury has thrown the insurance sector into turmoil with a surprise plan to stop forcing pensioners into annuities. Share prices have gyrated. It will be a while before investors get over the shock.