Aviva’s black dividend cloud has silver lining 7 Mar 2013 The UK insurer’s shares tanked after it slashed its dividend by 27 pct. A second payout cut in four years is a damning indictment of how Aviva has been run. But the necessary new cut should help its new chief executive untangle the company’s overleveraged corporate structure.
European insurer dividend angst looks overdone 21 Feb 2013 Allianz and AXA have respectively held and increased their dividends, a day after UK rival RSA cut its own. While all insurers are battling low investment yields, the larger players have more room for manoeuvre. The same logic should apply to the payout of fellow big beast Aviva.
HSBC/Ping An compromise saves face all round 1 Feb 2013 Chinese regulators have approved a Thai tycoon’s $7 bln purchase of HSBC’s stake in insurer Ping An. But the financing had to be rejigged. The Thais have rescued a juicy deal and the UK bank has avoided an embarrassing flop. The seemingly happy ending leaves much to be explained.
Generali’s radical words not yet echoed by deeds 14 Jan 2013 Italy’s biggest insurer is seeking 4 bln euros more capital by 2015 via selling assets. New CEO Mario Greco is rightly trying to move Generali away from its Italian power-broking past. But a really radical move would have been a sale of non-core stakes and a rights issue now.
Ping An flop could leave HSBC red-faced but richer 9 Jan 2013 The bank’s $9.4 billion plan to offload its stake in the Chinese insurer is in doubt. If regulators block the sale to a Thai billionaire, HSBC’s reputation will take a knock. Finding other buyers won’t be easy. But the recent market rally means the bank could end up better off.
AIG’s bailout helped, not harmed, shareholders 8 Jan 2013 The insurer’s pesky ex-CEO is suing the U.S. government and wants the company to sign on. It probably won’t, but the case is weak anyway. Shareholders did better than if AIG had gone bust, and the terms of the $182 bln rescue were kinder than private investors would have allowed.
Congress should push for mandatory gun insurance 17 Dec 2012 Firearm ownership is a U.S. constitutional right. But it comes at a cost. Requiring liability coverage could pass legal muster while helping to compensate victims. The market might also do a better job than politicians at keeping the most dangerous weapons from unstable hands.
AIG exit ties up one loose end for Geithner 11 Dec 2012 The Treasury secretary can rest a tad easier. He can now claim to have extracted the U.S. from its contentious $182 bln bailout of the insurer with a profit of $23 bln. But other Geithner legacies will weigh on his successor - notably an unreformed housing finance system.
HSBC proves canny trader with $9.4bln Ping An sale 5 Dec 2012 The emerging market lender flogged 16 pct of the Chinese insurer at a premium to the market price. That’s impressive compared with Bank of America and Goldman Sachs, who accepted discounts for their bank stakes. It should also buy HSBC time to explain its broader China strategy.
Swiss Life’s ill-advised M&A nightmare lives on 28 Nov 2012 The Swiss insurer has drawn a line under the ill-fated 2008 acquisition of AWD, the financial adviser. The brand will disappear, with 478 mln euros of book value. What remains is a problematic business that still sits uncomfortably within a conservative insurance outfit.
UnitedHealth takes risky $4.9 bln crack at Brazil 8 Oct 2012 The U.S. health insurer is paying around 40 times earnings for Brazilian market leader Amil Participações. UnitedHealth has grown fat on the American healthcare system. But when regulations are “100 percent different” there’s a danger the results will be too.
GE deal epitomizes U.S. bank regulation folly 24 Sep 2012 To free itself from the Fed’s strong grip, MetLife opted to unload $7 bln of deposits to the U.S. conglomerate. Tired of waiting for the headless FDIC’s OK, the insurer is enlisting the OCC instead. This classic arbitrage illustrates the trouble with the whole oversight regime.
Resolution shouldn’t give critics any more ammo 16 Aug 2012 Clive Cowdery’s insurance conglomerate is locked into paying fees to its M&A advisory arm despite ending its acquisition strategy. The fees are relatively small and cover expenses as well as salaries. But Resolution’s execs must be seen not to profit as the arrangement unwinds.
Aviva finally turns to face the right way 9 Aug 2012 Investors should look past the UK insurer’s weak first half. Following a management clear-out, Aviva is finally facing up to weaknesses, the most serious of which concerns capital. Chairman John McFarlane now needs to find a credible chief executive to implement the turnaround.
Winner’s curse haunts banks in Asian block trades 27 Jul 2012 The banks that arranged a $720 mln quick sale for Carlyle in China Pacific Insurance look to have taken a licking on the trade. Block deals may help league table credit, especially when business is moribund. But aggressive bidding can leave a bitter aftertaste.
Generali coup risks one more reason to sell Italy 1 Jun 2012 Shareholders, led by Mediobanca, are seeking to oust the boss of the country’s largest financial institution. Italy could do with a dose of shareholder activism, but this coup may do little to dispel its reputation for intrigue, hardly good for a country in crisis.
Pru vote heralds new normal for investor protest 17 May 2012 A third of shareholders voted against the UK insurer’s pay report, miffed at retrospective tinkering with targets. A solid performer like Pru might once have suffered only mild gripes. But the shareholder spring means transgressions now meet with much meatier disapproval.
ABI red tops add force to shareholder spring 10 May 2012 The UK investor group has issued two rare “red top” alerts reflecting misgivings about London-listed Cookson and 888, people familiar with the matter say. Directors at both may survive the dust-up. But the ABI is a powerful ally for owners getting tougher on pay and performance.
Shareholder spring claims first scalp at Aviva 8 May 2012 The UK insurer’s CEO is stepping down following a big protest vote over pay. Strategic doubts and underperforming shares had already put Andrew Moss’s future in doubt. But his departure raises the stakes for future shareholder uprisings - for both bosses and investors.
Buffett Rule divides Berkshire Hathaway faithful 6 May 2012 Ideological squabbling marred the annual Omaha love-fest this year. Ice-cream bars and newspaper tosses weren’t enough to distract shareholders angry about the politically charged tax plan with Warren Buffett’s name on it. It may even be an unplanned liability to Berkshire.