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from Breakingviews:
Ping An flop could leave HSBC red-faced but richer
By Peter Thal Larsen
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
A failed Ping An sale could leave HSBC red-faced, but richer. If regulators veto the UK bank’s $9.4 billion plan to offload its near-16 percent stake in the Chinese insurer, HSBC’s reputation will take a knock. But it could still end up financially better off.
Selling the stake to Charoen Pokphand, a company controlled by Thailand’s richest man, had obvious appeal. The two-stage deal offered HSBC a clean exit from an investment that, while lucrative, offered no strategic benefits. CP Group appeared to have the blessing of the Chinese authorities, which can stop any investor from owning more than 5 percent of an insurer. And unlike other Western banks that sold their Chinese financial stakes at a discount, HSBC negotiated a premium to Ping An’s market price.
A month on, however, the deal is wobbling. Chinese media have raised questions about the ultimate source of funds used to purchase the initial 3.2 percent tranche. China Development Bank, which is part-financing the remaining 12.3 percent stake, appears to have concerns. China’s Insurance Regulatory Commission may reject it, according to the South China Morning Post. If the regulator does not give the go-ahead by Feb. 1, both sides can walk away.
from Breakingviews:
Congress should push for mandatory gun insurance
By Robert Cyran and Reynolds Holding
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
Congress should push for mandatory gun insurance. Firearm ownership is a U.S. constitutional right. But as last week’s massacre again demonstrated, it comes at a cost. Requiring liability coverage could be one way to keep the most dangerous weapons from unstable hands without infringing the law.
from Breakingviews:
PICC seeks strength in numbers ahead of IPO
By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
The People’s Insurance Company of China is all about the power of big numbers. The insurer’s 17 investment banks have helped it sign up 17 “cornerstone” backers in advance of its $3.6 billion Hong Kong offering. Though they’re hardly big-name value investors, they improve the likelihood of getting the deal done.
from Breakingviews:
HSBC needs to put numbers on China ambition
By Peter Thal Larsen
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
HSBC’s global strategy overhaul has reached China: the emerging market lender is in talks about offloading its 16 percent stake in Ping An, the Chinese insurer. Chief executive Stuart Gulliver could go further, by putting some numbers on his ambitions for the bank’s other Chinese assets – particularly its even-larger shareholding in Bank of Communications.
from MuniLand:
Will Congress privatize federal flood insurance?
This summer, as part of the Federal Transportation Act, Congress made legislative changes to the Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program because it had borrowed $17 billion from the U.S. Treasury to pay off claims for flood damage from the 2005 Hurricane Katrina, and it was deeply insolvent. The editorial board of the Washington Post wrote:
In July, Congress reauthorized the program for five years and included reforms such as the gradual set-aside of a reserve fund, the phase-out of subsidized insurance for second homes and repeatedly flooded properties, a phased-in premium increase and $400 million in annual budget authority for flood-map modernization.
from Alison Frankel:
Can governors bar insurers from charging hurricane deductibles?
On Wednesday night, New York Governor Andrew Cuomo made a startling announcement: Homeowners "will not have to pay" so-called hurricane deductibles when they file insurance claims for damages caused by Sandy. In a follow-up press release Thursday morning, after other governors joined Cuomo in outlawing hurricane deductibles related to Sandy, Cuomo's Department of Financial Services, which regulates insurance companies, said that it had "informed the insurance industry that hurricane deductibles should not be triggered for this storm."
Can Cuomo and his DFS chief, Benjamin Lawsky, do that? Are state governors empowered to determine, by executive fiat, what constitutes a hurricane? The answer to that question, according to three insurance lawyers, is no -- and yes.
from Expert Zone:
Life insurance still struggling, non-life continues to grow
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The lean half of the financial year for insurance sales is behind us and the numbers for the life insurance vertical are not impressive. But the general insurance or non-life vertical has shown a healthy growth rate. Highlights are given below.
from Expert Zone:
Banks as a shop for insurance
(The views expressed in this column are the author's own and do not represent those of Reuters)
The concept of insurance plans being sold through banks is called ‘bancassurance’ and there is a lot of interest in this distribution channel from all the stakeholders - customers, banks, insurance companies and the regulator.
from Expert Zone:
Selling insurance through kirana stores
(The views expressed in this column are the author's own and do not represent those of Reuters)
India is considered to be a large untapped market for insurance products. There seems to be enough scope for improvement on the insurance density and insurance penetration counts for the country. While this is true, the challenge lies in reaching out to the large population in the rural areas where the traditional financial distribution channels just don’t make economic sense.
from Stories I’d like to see:
Digging deeper on the effects of Obamacare
Just because President Obama and his team have been pathetic when it comes to letting Americans know what’s in his healthcare reform law doesn’t mean the press shouldn’t be zeroing in on this huge, multifaceted story. The law is packed with changes – some of which have already taken effect but have barely been written about – whose ramifications range from likely upheavals in the advertising and marketing industries to an apparent lifeline for all Americans who are mystified or even tormented when dealing with their health insurers.
A marketing explosion
Let’s start with the business angles. As this article from Advertising Age points out, once various provisions of Obamacare take effect, key sectors of the healthcare industry, particularly hospitals and insurance companies, are going to have to become heavily engaged in consumer marketing and communications. In the last few years we’ve seen some hospitals use advertising to establish their brand, and, as I mentioned in this column in February, United HealthCare has been aggressively advertising to consumers.
