Has Buffett finally called a bottom for something? 23 Jan 2008 Well, maybe. Berkshire Hathaway s 3% stake in Swiss Re, bought on the open market, looks like a vote of confidence in the stock. But as usual with Buffett, other investors shouldn t take too much comfort. With a separate reinsurance deal, the wily investor has other angles too.
Ping An attempts to buck global trend 21 Jan 2008 Western markets are faltering, but China s secondlargest insurer plans to raise a $20bn warchest. The company s shareholders may not be happy, but there is an opportunity. Cashrich companies from the East can swoop like sovereign funds on weakened Western targets.
Fortis pays for Chinese big brother 29 Nov 2007 The battered BelgoDutch bank is giving Ping An a board seat even though it isn't injecting new capital. That said, the Chinese insurer's purchase of E1.8bn of shares in the market probably helped stop Fortis stock falling even further after its badly received carveup of ABN Amro.
Hedging sub-prime exposure is almost impossible 20 Nov 2007 Swiss Re has paid a $1.4bn price for providing protection against mortgage losses to an unnamed institution via two credit default swaps. But such disasters are likely to be rare. Few took advantage of these hedging strategies when they were on offer. Now they're no longer available.
Resolution battle adds to scars of former mutuals 12 Nov 2007 First Friends Provident, now Standard Life, have lost out in the auction for the UK insurer. Failure has damaged both. Sure, they were never going to find rival bidder Hugh Osmond a pushover. But in biting off more than they could chew, they appear to be following a wellworn script for former mutuals.
Grumpy old men keep creeping out of retirement 5 Nov 2007 Hank Greenberg is the latest deposed boss to rattle the cage of his former employer, AIG. Who s next? Sandy Weill? Jack Welch? It s easy to see why these former CEO superstars would want back in the game. Investors shouldn t hold their breath for a geriatric rescue.
Generali deserves its activist assault 25 Oct 2007 In attacking the Italian insurance giant, activist investor Algebris has taken on a huge target. Generali is at the centre of the Italian financial world. But it is more vulnerable than it first appears, particularly over its corporate governance.
Osmond won’t win Resolution with sub-market bid 27 Sep 2007 Offers below market price rarely win. There s little reason to think that the entrepreneur s lowball offer for the insurer will either. Sure, Resolution s alternative, a merger with Friends Provident, looks easy to beat. But Osmond will need to be more generous to do so.
Resolution lowers Osmond threat to Friends deal 10 Sep 2007 The entrepreneur s 16% holding no longer looks like a blocking stake now the insurer has cut to 50% the investor support it needs. Osmond could still stymy the merger with a rival bid. But at least, by polishing its credentials, Resolution has argued for a high price.
Rivals should be able to top Resolution’s bid for Friends 14 Aug 2007 Its offer is 15% below fair value. No wonder other bidders like Swiss Re and Zurich are said to be interested. But there's no need to rush into a bidding war: Resolution may pull out. And though Friends is cheap, not all its businesses are attractive.
Aviva’s new boss tries velvet revolution 9 Aug 2007 Andrew Moss didn t have the option of a brutal shakeup. He was associated with the strategy which left the UK insurer in the doldrums. But in decrying big deals and focusing on Aviva s loose ends, he is going a long way to changing tack. That could help the firm's shares.
Osmond should spell out plans for Resolution 27 Jul 2007 The entrepreneur may well have some ideas to create more value for Resolution than its £8.6bn nilpremium merger with Friends Provident. But Osmond needs to say what these are especially since it isn t obvious he wants to take over Resolution or could even afford to.
Friends Provident deal looks good for Resolution boss 25 Jul 2007 Clive Cowdery gets the top job in this £9bn merger of equals. And his CEO, Mike Biggs ends up as number two. Cowdery sacrifices Resolution's name, but there's not as much left to resolve. The deal ends his original model of buying closedlife books.
Resolution and Friends plan sensible £8bn merger 23 Jul 2007 The two UK life insurers are roughly the same size and have opposite problems too much capital in Resolution and too little at Friends. Also, Resolution s model of buying cheap assets has lived out its brief life. So a planned merger is a natural if no one else breaks in.
Allianz outsmarted by market in E10bn AGF offer 18 Jan 2007 The German insurer's delay in buying full control of its French subsidiary has led to AGF's share price rocketing. What's more, the current offer may not even win. That said, it still makes sense. Integrating AGF should free some capital and trim costs.
Macquarie lightens the leverage in Techem bid 16 Nov 2006 That s counterintuitive. Don t financial investors usually gear targets up to the hilt to boost returns? True. But there can be legal problems doing this with German companies. So it may be smarter to inject more equity upfront.
Lloyds will want more than £8bn for Scottish Widows 16 Oct 2006 That might have been enough to tempt the UK bank while its life arm was struggling. But it looks stingy now Widows is pulling its weight. It s a lower multiple of embedded value than other life businesses are on. And by cutting profits, a deal may put Lloyds dividend at risk.
Pension buyouts: where are the customers? 5 Oct 2006 Edmund Truell has joined a crowded field of insurers looking to buy up corporate pension liabilities. But so far, there are few takers. That s not surprising, because the cost remains really high. The bet is that regulatory pressure will force companies to insure themselves.
Aviva sweetens the pill on $2.9bn AmerUs deal 13 Jul 2006 A betterthanexpected trading update and lowerthanexpected price may ease some worries about the UK insurer s US buy. But it s still hard to get very bullish about a deal that gives Aviva no more than a toehold in a huge, highly competitive market.
Standard Life squeezes institutions in £4.7bn IPO 10 Jul 2006 The UK insurer made a success of the offering by encouraging members not to sell but buy new shares. That limited supply to institutions. Retail investors were right to stay in on this occasion. Standard Life looks a good value play with inbuilt defensive characteristics.