Tue, Sep. 29, 6:06 PM
- Munich Re says that Berkshire Hathaway (BRK.A, BRK.B) had cut its stake in the German reinsurance company, to 9.7% from about 12% -- a money-where-your-mouth-is backing of Warren Buffett's feeling that reinsurance has taken a turn.
- Buffett had invested in Munich Re and peer Swiss Re (OTCPK:SSREY) from 2008 to 2010, at the end of which Berkshire triggered the 10% reporting threshold.
- But at Berkshire's annual meeting in May, Buffett said the reinsurance peak was "history": “It’s a business whose prospects have turned for the worse and there’s not much we can do about it."
- Recently, Berkshire also said it had bought another 3.5M shares of Phillips 66, bringing its beneficial ownership to 61.5M shares.
Wed, Sep. 23, 9:30 AM
- Reinsurer Swiss Re (OTCPK:SSREY) is buying Guardian Financial Services from its private-equity owners for £1.6B (about $2.45B) in cash and debt, to boost its business unit's position in UK life business.
- The company's Admin Re unit is a leading closed life book consolidator and will add 900,000 annuity, life insurance and pension policies via the purchase from Cinven, to bring its total business to more than 4M policies, and boost Swiss Re's AUM by £12.5B.
- Admin Re is expecting around $1.7B in gross cash (including synergies) over the first three years.
Mon, Apr. 20, 3:13 PM
- The Bank of England months ago penned a letter to the U.S. Treasury asking why The Oracle's reinsurance operation has been left off of Financial Stability Board's provisional list of too big too fail institutions.
- MetLife (NYSE:MET) - which has sued the U.S. government over its curious designation as a SIFI - would also probably like to know, as would a number of other primary insurers that have been so tagged.
- Berkshire (BRK.A, BRK.B) is part of a group of reinsurers - Swiss Re (OTCPK:SSREY) and Munich Re also come to mind - which have thus far escaped such scrutiny, even though primary insurers might argue the reinsurers are more important to the global financial system. The Basel-based FSB was supposed to make a reinsurance list public last year, but postponed the effort in November "pending further development of the methodology."
- Insurance is Berkshire's most significant business - accounting for 27% of net earnings last year - and providing Warren Buffett with the capital to invest in stocks and acquisitions.
- Source: FT
Sep. 9, 2014, 11:59 AM
- "Fierce competition, over-capacity and low returns continue to put pressure on the industry," says Moody's, reinforcing its negative outlook on the global reinsurer sector (first changed to negative in June).
- There are positive developments though, particularly a slowing in price declines. Moody's previously believed a 15-20% drop in cat prices next year a "distinct possibility," but says such a severe scenario has become less likely.
- One reason for the slowing price decline, says Moody's, is non-traditional competitors like insurance linked securities (ILS) are having a tough year and have less scope to cut pricing.
- Among the reinsurers: ACE, XL, PRE, RE, RNR, AHL, ENH. AXS, ACGL, RGA, MRH, UNM, OTCPK:SSREY, GLRE, TPRE.
Jan. 2, 2014, 8:24 AM
- Following a 2013 in which the number of natural and man-made disasters fell by half, reinsurers could be hit with up to a 25% decline in premium revenue this year, according to broker Willis Re.
- Combining with the lack of catastrophes is a market in oversupply as pension funds and hedge funds (like GLRE and TPRE) rush into the business - a $50B increase in industry capital, says Willis CEO John Cavanagh.
- U.S. property casualty reinsurance faces the biggest hit - 10-25% - while European premiums could fall 10-15%.
- Hannover Re (HVRRY) last week said it expected premiums to fall this year, fueling concern about a price war with competitors like Swiss Re (SSREY) and Berkshire Hathaway (BRK.A, BRK.B).
- Among U.S. reinsurers: ACE, XL, PRE, RE, RNR.
Oct. 14, 2013, 5:00 PM
- Swiss Re (SSREF.OB) is considering divesting its Aurora National Life Assurance business in a retreat from the U.S. life and health insurance market, Bloomberg reports. It has retained Barclays for the purpose, and the sale may fetch more than $400M according to sources.
- The unit held ~$3B in assets and serviced more than 88K policies as of 2012. Another segment of the SRLC America Holding parent were sold in 2012 for $663M to Prudential (leading to a $399M loss).
Sep. 8, 2013, 10:46 PM
- MetLife (MET), Prudential (PRU), Swiss RE (SSREY.OB, SSREF.OB), and JPMorgan (JPM) are among those investing in a new $400M P-E fund being put together by Leapfrog Investments to sell financial services in developing countries.
- The group will disclose Monday it has raised $204M thus far and plans to raise another $200M in coming months.
- The fund is looking at prospective investments in India, Indonesia, and Sri Lanka, as well as parts of sub-Saharan Africa.
- It's no secret developed market insurers have looked to emerging economies for growth, but those efforts previously were aimed at hitting relatively prosperous emerging middle classes, and avoiding the high volume, low margin business of offering financial services to the world's poorest people. This has changed of late and Leapfrog says the big players are increasingly interested in this area. "We see decades of opportunity ahead," says Leapfrog founder Andrew Kuper.
Nov. 14, 2012, 9:06 AMRoche (RHHBY.OB) has come up with a novel way to sell cancer drugs to millions of Chinese who couldn't otherwise afford treatment: first sell them insurance. Roche has teamed up with Swiss Re, which re-insures local insurers that sell the policies. Around 6M people have bought the scheme and another 6M are expected to sign up next year. | Nov. 14, 2012, 9:06 AM | Comment!
SSREY vs. ETF Alternatives
The Swiss Re Group is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. Dealing direct and working through brokers, its global client base consists of insurance companies, mid-to-large-sized corporations and public sector clients. From... More
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