Shareholder spring takes aim at exec pay black box 3 May 2012 UBS and Aviva are the latest firms to feel the executive pay backlash. As the stream of votes against boards’ remuneration swells, shareholders have a golden opportunity to secure meaningful reforms. Moves that clarify performance targets will be top of the agenda.
Aviva provokes subtly different shareholder spring 30 Apr 2012 The UK insurer is the latest company to review executive pay in response to investor pressure. Shareholders may have been emboldened by a rising tide of pay revolts elsewhere. But discontent at Aviva seems as much about long-term underperformance as short-term pay excess.
Unipol probe may further muzzle Italy powerbrokers 27 Apr 2012 The Italian antitrust agency has halted bidding for Fondiaria, the country’s second largest insurer. Blocking a currently favoured bid from Unipol would be good news for minority investors. But coupled with new boardroom curbs, it could also strike another blow for corporate reform.
U.S. sale could kickstart Aviva’s spring clean 12 Apr 2012 The UK-based insurer is mulling a sale of its U.S. arm, according to reports. Offloading North American operations would make regulatory sense. But it would also be a welcome sign that Aviva is getting to grips with parts of its empire that aren’t pulling their weight.
Obama backs healthcare defender – until he doesn’t 29 Mar 2012 Despite top lawyer Donald Verrilli’s stumble before the Supreme Court, the White House gave him a confidence vote. That’s what famed Yankees manager Billy Martin would get before being fired. Verrilli’s miss may not change the result but it costs him credibility - if not his job.
Paulson gets small redemption with the Hartford 21 Mar 2012 The hedge fund investor’s funds lost on average above 25 percent of their value in 2011 as bets on everything from financial sector recovery to Chinese forests went pear-shaped. A bit of activist success with the U.S. insurer is some consolation - but Paulson needs more than that.
EU eases insurers’ worst capital fears – for now 21 Mar 2012 The European Parliament has accepted that British insurers need protection from the EU’s sprawling new regulatory framework. That’s a relief. But the Solvency II rules could yet have unpleasant consequences. The likes of Pru could still move their headquarters away from Europe.
Prudential’s threat to quit UK isn’t just hot air 12 Mar 2012 The insurer is reviewing its domicile, citing the burden of European regulation. Upping sticks to Hong Kong wouldn’t protect Pru from all the reforms, and would yield few tax savings. But if the new rules turn out bad, decamping to its main growth market would make sense.
Aviva manages euro zone dependence – for now 8 Mar 2012 A third of the UK insurer’s sales come from continental Europe. In 2011 it managed the slowdown sufficiently to repair its capital base and boost its dividend. But Europe’s woes are not yet over. And regulatory reforms could yet undermine Euro-focused insurers’ business models.
Fondiaria saga recalls Italian power-broker heyday 6 Mar 2012 The struggling Italian insurer’s investors have to choose between merging with rival Unipol and a private equity offer led by ex-Capitalia chief Matteo Arpe. Both carry risks. But the benefits of the Unipol deal in particular look skewed to power-brokers rather than shareholders.
April Fool’s comes early to comical M&A market 6 Feb 2012 It’s hard not to smirk at America’s largest title insurer buying steak chain O’Charley’s. Not only does it sound like a bad joke, it defies conventional wisdom both on conglomerates and the use of premium proceeds. But for idle bankers, even oddball deals are no laughing matter.
ING should further carve up Asian insurance sale 23 Jan 2012 The Dutch bancassurer has already separated out the disposal of its Asian insurance arm from its European operations. But potential acquirers are not all interested in the same bits. To maximize value, ING might be better off breaking the sale into still smaller parts.
Unipol’s latest empire-building looks a stretch 18 Jan 2012 The Italian insurer’s attempted takeover of BNL in 2006 was a fiasco. An ambitious four-way merger to create a rival to Generali makes greater financial and commercial sense. But the plan still requires jittery shareholders to support a huge capital hike.
Delphi slips Tokio Marine a $2.7 bln spiked cocktail 21 Dec 2011 That’s one explanation for the Japanese insurer’s Godzilla-sized overpayment for the U.S. group. Including a special dividend, it’s paying a near 80 pct premium. It’s another example of Japan Inc throwing shareholders under the bus in the name of international expansion.
Pru’s AIA mess finally claims deserved scalp 20 Dec 2011 The UK insurer’s chairman, Harvey McGrath, says he is to retire, 18 months after the badly handled bid for Asia’s AIA. It’s a shame there’s no replacement yet. But Pru won’t struggle to find one. And the board has shown accountability while avoiding a disorderly transition.
Morgan Stanley housecleaning will please Basel 13 Dec 2011 Chief Executive James Gorman’s settlement with bond insurer MBIA puts a big chunk of the financial crisis legacy behind the firm. At $1.8 bln it doesn’t come cheap. But it puts Morgan Stanley on the right track by boosting regulatory capital and tidies up a very messy year.
Indian privatisations need time, and hard work 10 Nov 2011 Practical problems often come with moves that are sound in principle. Indian authorities are mulling the part privatisation of four general insurers. As with many other state-owned assets, there’s a tonne of preparatory work to be done before the firms can contemplate a float.
U.S. courts make death arbitrage a tougher game 26 Sep 2011 Cashing out life insurance can keep a policyholder afloat if he suddenly needs the cash. But an active secondary market tempts some to buy insurance just to sell the policy on. Delaware judges have wisely made such ghoulish bets on life expectancy easier for insurers to kill.
Google’s $12.5bln insurance buy may worry partners 15 Aug 2011 Paying up for Motorola Mobility locks in patents to help ensure Apple and Microsoft can’t stifle Google’s Android mobile operating system. But the search giant’s plans for its new hardware company will be the key concern for regulators and current Android handset makers alike.
Sweeter PR not enough to revitalize M&A deal 1 Aug 2011 U.S. reinsurer Validus may hope that by switching flacks in the heat of battle it can persuade its shareholders to like the bid for $3.2 bln rival Transatlantic they have so far scorned. But messaging doesn’t win deals, numbers do. On that score, Validus isn’t far enough ahead.