All articles by Verdict Staff
Verdict Staff
New York Life goes from strength to strength
A strategy of aggressively marketing its financial strength under banners such as “Built For Times Like These” and “Guarantees Matter” paid off for New York Life (NYL) in 2009. For the US largest mutual insurer it was a year of record insurance sales, which increased by 11% compared with 2008 to $2.66bn US life insurance sales provided the biggest boost, increasing 14% in 2009 compared with a 15% fall in the life industrys individual life sales reported by financial services organisation LIMRA.
Not all insurers’ websites are created equal
When it comes to using the internet to put their message across, some US insurers are getting it right while others are failing, reports internet consultancy and research firm Customer Respect Group (CRG) In its first quarter 2010 evaluation, CRG named five insurers with websites meeting their full range of criteria in areas including best practices, online trends and developments within the commercial web environment
US ripe for conversion options
Life insurance conversion options allow level term policyholders to convert their term coverage to a new, permanent whole life policy within a specified number of policy years
Legal & General bets on property recovery
Commercial property is a good bet Legal & General bets on property recovery believes UK insurer Legal & General (L&G), announcing the launch of its UK Property Income Fund
News Digest
INDUSTRY TRENDSFitch remains downbeat on US life insurers Rating downgrades of US life insurers will continue to outnumber upgrades in 2010, warns Fitch Ratings On a more positive note, the ratings agency predicts the pace and number of downgrades will moderate compared to action taken in 2009.
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News Digest
Marsh acquires HSBC insurance broking unit, Boost for BNP Paribas affluent client reach, CNP Assurances completes Southern European refocus, Allianz renewable energy investment forges ahead, Swiss Res pioneering UK longevity risk deal…
News Digest
Still repairing financial damage caused by residential property losses, US insurers face the prospect of hefty losses on commercial real estate (CRE), warns rating agency Fitch. Based on its assessment, Fitch believes weakening CRE fundamentals are set to trigger a jump in defaults across all segments of commercial property which on its conservative estimate will result in the US life industry sustaining losses of between $15.7 billion to $19.1 billion in the near to intermediate-term.
Axa’s Asia-Pacific ambitions thwarted
Putting at least a temporary end to Axas ambitions to grow its Asia Pacific footprint substantially, a deal that would see the French insurers 64 percent-owned Axa Asia Pacific Holdings (APH) effectively split in two has met with unanimous rejection by APH board.Under the proposed deal, Axa would acquire 100 percent of APHs Asian businesses.Australian insurer AMP would acquire 100 percent of Axa APHs Australian and New Zealand businesses.Specifically, it was proposed that AMP would acquire 100 percent of APH for A$11 billion ($10.2 billion), of which A$6 billion would comprise cash to Axa.AMP minorities would receive A$1.3 billion in cash and shares in AMP valued at A$3.7 billion.In turn, it was proposed that Axa acquire from AMP 100 percent of APHs Asian operations for $A 7.7bn in cash This would result in a net cash outlay by Axa of A$1.8 billion.Commenting on the proposed deal, chairman of Axas management board Henri de Castries said: This transaction would reinforce Axas growth profile by doubling its exposure to the Asian life and savings market and further optimise the corporate structure of the group.APH has operations in Hong Kong, China, India, Thailand, Philippines, Indonesia, Singapore and Malaysia.Responding to the proposed deal APHs chairman Rick Allert said in a statement: It is the unanimous view of the Independent Board Committee that the proposal significantly undervalues Axa APH.The proposal has been received against the backdrop of recent weakness in global financial markets and before the growth of our Asian operations is fully reflected in our profitability.He added that the terms of the proposal also imposed excessive uncertainty and risk on APHs minority shareholders.APHs Asian operations are the most significant portion of its business and in the first half of 2009 contributed two-thirds of Axa APHs operating earnings of A$255.5 million in the first half of 2009
News Digest
REGULATIONUS life insurers excluded from oversight by new Federal agencyFollowing tough opposition from life industry lobbyists, the US House of Representatives Financial Services Committee has excluded life insurers from the jurisdiction of the Consumer Financial Protection Agency (CFPA).On 22 October the committee approved legislation that will lead to the formation of the CFPA, a Federal body that will have wide regulatory powers.Exclusion of life and annuity product providers from the CFPAs terms of reference followed Congresswoman Gwen Moores adding of language to the bill that will exclude life insurance and annuities in the final legislation.The decision to exclude the life and annuity industry from the legislation followed strong opposition to their inclusion from a number of industry bodies including the American Council of Life Insurers, the Insured Retirement Institute and the National Association of Insurance Financial Advisors (NAIFA).MERGERS AND ACQUISITIONSAIG takes big hit on Taiwan life unit saleAs part of its ongoing asset sales programme American International Group (AIG) has sold its 97.6 percent stake in its Taiwanese unit Nan Shan Life Insurance to financial services company Primus Financial Holdings and investment company China Strategic Holdings, both of which are Hong Kong-based.The consideration for the sale is $2.15 billion, the largest sum yet obtained by AIG in its sales programme AIG anticipates reporting a $1.4 billion loss on the sale.Founded in 1963, Nan Shan is Taiwans largest life insurer by total book value and third-largest by total premiums. It serves 4 million policyholders via 24 branches, 450 agency offices, 4,000 employees and 34,000 agents.Nan Shan reported premium income of TWD219 billion ($6.7 billion) in 2008.COMPANIESAIGs US life boss jumps ship for AllstateAmerican International Group (AIG) has lost another senior executive with the decision by the US composite insurer to appoint Matthew Winter as president and CEO of
News Digest
COMPANIESNippon Life makes $500m investment in Prudential FinancialContinuing to expand its presence in the US insurance industry, Japans largest insurer Nippon Life has purchased a $500 million 10-year exchangeable surplus note issued by The Prudential Insurance Company of America, a unit of Prudential Financial Under the terms of the transaction, Nippon Life can exchange the surplus note for Prudential Financial ordinary shares at any time, at Nippon Lifes option, beginning on the fifth anniversary of issuance of the note.Already holding 2.56 million shares in Prudential Financial, Nippon Life has a stake of almost 0.6 percent in Prudential Financial worth some $130 million at the US insurers current share price.In the US, Nippon Life also holds a 7 percent stake in financial conglomerate Principal Financial Group and a 5 percent stake in Russell Investments, a unit of insurer Northwestern Mutual, which has assets under management of about $150 billion