Insurance

Prudential ousts Bloomer

24 Mar 2005

The chief executive lost the confidence of many investors after several uturns, including a £1bn rights issue to fund domestic expansion. But the rest of the board, led by chairman David Clementi, has done a uturn too. It publicly backed Bloomer six months ago.

Greenberg steps down as AIG boss

14 Mar 2005

Few companies have embodied the personality of their leader as AIG has that of Hank Greenberg. For decades that served shareholders well. But he failed to change with times. Trying to tough out the regulators was more than his independent directors could bear.

Aviva promises juicy synergies in £1.1bn RAC deal

9 Mar 2005

Forget revenue synergies. The UK insurer can justify the acquisition purely on the scope to improve the breakdown group's measly margins. The deal will bolster chief Richard Harvey s reputation for careful M&A. He may wish to exploit that by pursuing bigger deals overseas.

Prudential increases operating profits by 39%

2 Mar 2005

The UK insurer has also flagged up increasing repatriations of capital from its overseas operations. That gives credibility to the idea that Pru can keep financing growth once it has spent the £1bn raised in last year s rights issue.

L&G signals confidence in dividend

24 Feb 2005

The UK insurer has been dogged by questions about the sustainability of its payout. In response, it s raised the dividend above inflation. But low dividend cover and an impending change of chief executive mean fears of a dividend cut could resurface.

Osmond sees off rival bid for HHG life fund

10 Feb 2005

The entrepreneur killed Resolution s possible counterbid, raising his £1bn offer by 5%. It should cheer other closed funds looking to sell. Next time round, anyone selling a closed life fund should run a properly structured auction.

Is the closed-life arbitrage closing?

4 Feb 2005

The UK life industry has been dumping closed books at huge discounts to net asset value. But the possible bidding war for HHG s £1bnplus fund suggests buyers may already be arbitraging away the easy pickings.

Osmond prepares ballsy plan for HHG life assets

10 Dec 2004

The leisure entrepreneur has paid £1bn to secure the UK s largest closed life fund deal. That s a rich price. To make it pay he must boost returns on the fund s £26bn asset base, using derivatives or even hedge funds. Will the regulator let him?

Allianz ups Dresdner guidance

12 Nov 2004

The task now is for Dresdner to earn its cost of capital. That will require a stepup in the performance of investment banking unit DKW. The German insurer s troublesome bank is going to break even this year even if you include restructuring costs.

Zurich must take Converium litigation seriously

10 Nov 2004

Trying to prove the Swiss insurer is liable for the problems of Converium, the reinsurer it spun off in 2001, is a highly ambitious task. But the materiality of Converium s problems strengthens the hand of litigants, especially if they can mobilise its institutional investors.

Munich Re drops E2bn profit forecast

8 Nov 2004

The world s largest reinsurer has decided that its key performance goal for 2004 is now just a stretch target. Yet its latest results aren t so bad that they necessitate this. New CEO Nikolaus von Bomhard seems to be covering himself.

Pru cash-call is legacy of overambitious strategy

22 Oct 2004

Under CEO Jonathan Bloomer, Prudential s empire has grown at an impressive pace. But this month's surprise rights issue suggests that the strategy was too great a stretch for the UK insurer's capital base.

Pru’s £1bn rights lacks credibility

19 Oct 2004

It s hard to take seriously the insurer s stated reasons: funding UK growth and meeting new solvency requirements. The Pru itself said the UK was dull just months ago, and the solvency regime is hardly news. It looks as if it s filling an Eggshaped hole.

Generali’s H1 profits smash forecasts

9 Sep 2004

And for the right reasons. The Italian insurer has shown improved premium income growth and underwriting efficiency. Generali is now well ahead in delivering on its threeyear plan. But that doesn t mean it will enjoy a premium rating any time soon.

Allianz boss sets good example on pay

17 Aug 2004

Michael Diekmann has revealed a fixed salary of E900,000. That seems small, but he could earn a lot more in bonuses. Other German companies should follow suit. This would encourage greater transparency and avoid onerous legislation. Michael Diekmann, the boss of Germany's largest insurer, has disclosed his salary. But Allianz has not revealed his bonus and options. Allianz should disclose the total sum and other German companies should follow suit. This would avoid onerous legislation.

Allianz investors unmoved by Dresdner recovery

16 Aug 2004

The German insurer s shares are down 25% this year even though its banking unit has returned to profit. Why the cool response? One reason may be that Dresdner s recovery is weedy. Another is that the rest of Allianz is only doing all right.

Converium’s credibility sinks as fast as its stock

20 Jul 2004

The Swiss reinsurer is upping its reserves again US casualty claims yet again. Rivals nailed this problem several years ago. Converium's management and shares are limping. The snag for investors is that it may be too small to be attractive to a bidder.

Pru CEO enters tricky period

11 Jul 2004

All things being equal, a drawnout auction wouldn t damage CEO Jonathan Bloomer since the bank is a small disposal for the UK insurer. But all things aren t equal. Bloomer s credibility was already low before the auction began. This week will be six months since Jonathan Bloomer revealed the UK insurer had put online bank egg up for auction. Bloomer s credibility was low in January. While the deal is relatively small, protracted negotiations will fuel mutterings about his future.

Standard Life’s UK pension sales take a dive in H1

1 Jul 2004

The proposed flotation may be two years away, but that's not long to reinvent the whole company by allocating capital to better markets. The life insurer s spat with the regulators has had a hugely damaging impact on the core business. The life insurer s public spat with the regulator has damaged its core UK personal pensions business. Annualised sales now match those of rival Legal & General. But this doesn t mean Standard Life should float at L&G s £6bn valuation.

Munich Re declares itself turned around

3 Jun 2004

That may be jumping the gun. But at least Munich Re is acknowledging its business needed a good kick. Its commitment to driving profitability shows it's prepared to let the concerns of investors and rating agencies influence its thinking.