Investment banks line-up to dismantle insurer’s global empire
Compiled by Insurance24
HARARE, Investment banks are lining up to manage potential divestments by Anbang Insurance Group Co., the once-acquisitive Chinese insurer that snapped up assets around the world before being seized by the government.
Officials from Anbang and the Chinese banking and insurance regulator are interviewing advisers to arrange the sale of parts of the insurer’s portfolio, people with knowledge of the matter said, asking not to be identified because the information is private. Some bankers were in Beijing earlier this month to pitch for the work, according to one of the people.
Any bank hires would mark the formal start of Anbang unravelling its buying binge, after the Chinese government said in February that it would consider “all or partial” sales of its assets. Anbang first gained prominence in 2014 with the $1.95 billion purchase of New York’s Waldorf Astoria hotel and continued its spree by snapping up financial companies such as Dutch insurer Vivat NV and marquee properties around the world like San Francisco’s Westin St. Francis.
That spree came to an abrupt end last June, when regulators detained Anbang’s Chairman Wu Xiaohui as part of a wider crackdown on risks in the financial system. Last month, Wu was accused of masterminding a $10.4 billion fraud, using unauthorized sales of investment-type policies to prop up the acquisitive company’s capital.
Advisers may also help find new investors to buy a stake in Anbang, the people with knowledge of the matter said. Vivat’s 2.375 percent 2024 bonds shed losses Thursday to rise as much as 0.14 cent on the euro.
Luxury Portfolio
The China Banking and Insurance Regulatory Commission didn’t immediately respond to a fax seeking comment. Anbang currently has no plan to dispose assets, its public relations department said in response to Bloomberg queries.
Anbang bought Vivat in 2015 and agreed to invest 1.35 billion euros ($1.7 billion) to recapitalize the company. The next year, it acquired Strategic Hotels & Resorts Inc. for about $6.5 billion, gaining a portfolio of luxury properties including the Westin St. Francis and JW Marriott Essex House in New York. The Chinese company also owns controlling stakes in South Korea’s Tongyang Life Insurance Co., Antwerp-based insurer Fidea NV and Belgian lender Nagelmackers.
The Chinese government has been seeking to broker the sale of a stake in Anbang, Bloomberg News reported in January. Regulators said last week that Anbang will start the selection of strategic investors and aim to introduce private capital as soon as possible.
China’s pledge to rein in overseas dealmaking has prompted a reversal of a spree that many conglomerates had embarked upon in recent years. HNA Group Co. is disposing billions of dollars worth of assets spanning hotels to property, and Singapore’s Temasek Holdings Pte is studying potential investments in its Swissport Group and Gategroup Holding AG units, people with knowledge of the matter said this week.
CEFC China Energy Co. plans to sell its entire property portfolio with a book value of more than $3.2 billion, people familiar with the matter said last month.
Bloomberg 
Home insurance companies are overcharging 13 million households, finds research
HARARE, The study shows that loyal customers could be paying 70 per cent more than a new customer would for the same policy. The Independent Online Citizens Advice said that charging loyal customers more than new
customers had become a ‘market-wide practice’
Getty Home insurance companies may be overcharging up to 13 million UK households, new research suggests, with older people particularly hard hit.
A study conducted by Citizens Advice and published on Friday shows that 40 per cent of people over the age of 65 have had their home insurance policy for over five years, which means they could be paying 70 per cent more than a new customer would for the same policy.
The network of charities said that for someone with the cheapest policy for building and contents insurance, this could equate to an extra £110 a year, on average, that they would not be paying if they were a new customer.
Citizens Advice said that charging loyal customers more than new customers had become a “market-wide practice” and that companies often hike prices substantially when existing customers renew their policies.
The research suggests that almost one-third of the entire home insurance market might be paying more than they would be if they were a new customer.
“Home insurance companies are taking advantage of people’s loyalty, and it’s older people who are suffering the most,” said Gillian Guy, chief executive of Citizens Advice.
She also urged the Financial Conduct Authority to crack down on the practice of overcharging.
“Vulnerable customers are the hardest hit and must be protected from this unfair practice,” she said.
Earlier this year, the FCA set out rules to protect consumers by making it a requirement for companies to explicitly inform customers what their premium at renewal was in the previous year.
UK consumers face record high car insurance premiums as prices soar 11% in one year. The jump deals another sharp blow to UK households who have seen their incomes squeezed as a result of inflation outstripping pay rises
The average premium taken out in the first quarter of the year was £48 more expensive than in the same period last year
UK consumers are facing record high car insurance premiums, after the average cost of a policy soared 11 per cent to £484 in the last 12 months, according to new figures from the industry’s main trade body.
The average premium taken out in the first quarter of the year was £48 more expensive than in the same period last year with younger drivers and pensioners facing even steeper increases, the Association of
British Insurers said on Tuesday.
The pace of price hikes is also quickening, with the average cost private comprehensive motor insurance jumping 4.8 per cent from the first quarter of the year, when average premiums were £462.
Car insurance is at a record, and it’s down to insurers’ greed. The jump deals another sharp blow to UK households who have seen their incomes squeezed as a result of inflation outstripping pay rises.
It means car insurance premiums are rising almost four times the rate of inflation and marks the biggest year-on-year rise since the ABI began tracking premiums for private cars in 2012.
The ABI says its figures are the only published measure of the actual premiums paid by customers, rather than quotes.
The ABI claims that the rapid rise is due to the recent Government decision to cut the personal injury discount rate – a calculation used to determine lump sum compensation to claimants who have suffered life-changing injuries – to minus 0.75 per cent, down from 2.5 per cent.
The move sent insurers’ share prices tumbling, and provoked widespread condemnation from the industry. Much of the cost is now being passed on to consumers.
Insurance Premium Tax also went up to 12 per cent on the first day of June, up from 10 per cent.
The ABI said it would now publish month-by-month premium data, in addition to its quarterly figures, to show the “unprecedented pressures” the changes are putting on premium prices. The latest figures show average premiums in the month of June alone were £498, the ABI said.
However, Tom Jones, head of policy at Thompsons Solicitors, said insurers have seen fraudulent car accident claims fall 5 per cent in the last year, making the significant jump in premiums hard to
justify.
“Look behind the hyperbole and the ABI’s own figures show a downward trend in fraudulent – or allegedly fraudulent – claims. Presumably, the £1.3 billion in savings made by insurers as a result of detecting
those reduced claims are finding their way into fat cat shareholders’ pockets, because they certainly aren’t being used to reduce premium prices for consumers,” Mr Jones said.
“The insurance industry brazenly sets itself against a growing body of evidence which contradicts its position on personal injury market reform by cherry picking the figures it needs to pressure two consecutive governments to change the law on small claims in order to increase their own profits.”
Further price increases could be in store early next year, when most insurance companies are due to renew their own reinsurance policies.
These are likely to be more expensive as they will now have to take into account the higher costs associated with the discount rate, the ABI said.
