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Max Capital Merges With a Fellow Reinsurer

Thu, 04 Mar 2010 00:48:03 EST

HAMILTON, Bermuda (TheStreet) -- Max Capital will merge with fellow reinsurer Harber Point and be renamed Alterra Capital Holdings.

The combined company will trade on Nasdaq under symbol "ALTE."

Harbor Point shareholders will receive 3.7769 Max Capital shares for each Harbor Point share owned under the merger agreement, which was described as a merger of equals. ...

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Prudential PLC to Buy AIG Asia Unit for $35.5B

Mon, 01 Mar 2010 05:38:26 EST

Updated from 3:08 a.m. EST

LONDON (TheStreet) -- Prudential PLC said Monday it would buy AIG's Asian unit for $35.5 billion.

Prudential will pay $25 billion in cash and $10.5 billion in new shares and other securities for AIG's American International Assurance subsidiary. ...

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Berkshire Hathaway Rebounds in 2009

Sat, 27 Feb 2010 16:13:20 EST

Updated from 12:04 p.m. EST

Update includes Berkshire stock performance during 2009 and information on its investment portfolio.

OMAHA, Neb. (TheStreet) -- Warren Buffett's Berkshire Hathaway saw its annual performance improve significantly in 2009. ...

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Insurer Aegon Swings to Profit

Thu, 25 Feb 2010 06:11:09 EST

AMSTERDAM (TheStreet) -- Dutch insurer Aegon, which owns the Transamerica insurance company in the U.S., swung to a fourth-quarter profit as it benefited from gains on investments and lower impairments.

Earnings were 393 million euros, a swing from a year-earlier loss of 1.18 billion euros.

"Clearly, the steps we have taken over the past year have delivered solid results -- a return to profit, reduced expenses, and continued customer confidence, resulting in increased sales in all country units," said CEO Alex Wynaendts, in a statement. ...

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WellPoint Falls on Subsidiary Accusations

Tue, 23 Feb 2010 13:56:21 EST

NEW YORK (TheStreet) -- WellPoint shares fell as much as 1.5% Tuesday after the California Insurance Commissioner said late Monday that subsidiary Anthem Blue Cross could be fined $7 million for claims handling irregularities.

Following an investigation into consumer complaints, California Insurance Commissioner Steve Poizner said the insurance department had found more than 700 violations of state's claims handling law.

Wellpoint failed to respond to state requests to hand over certain documents to investigate consumer complaints, according to SNL Financial. Additionally, it misrepresented policy provisions to consumers, SNL Financial said. ...

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Obama Seeks Limit on Insurer Rate Hikes

Mon, 22 Feb 2010 01:32:20 EST

WASHINGTON (TheStreet) -- President Barack Obama is expected Monday to unveil a proposal that gives the U.S. government the power to limit rate increases by health insurers.

The White House is expected to post the proposal at 10 a.m. EST Monday on its Web site as part of Obama's larger plan to overhaul the insurance industry, the Associated Press reports. Obama's proposal comes ahead of a health care summit with leaders of Congress later this week.

Under the Obama proposal, the Health and Human Services Department, in conjunction with states, will have the power to deny certain premium increases, roll them back, or demand that consumer get rebates, the AP reports, citing a White House official. ...

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Swiss Re to Pay Back Buffett in 2011

Thu, 18 Feb 2010 09:31:49 EST

OMAHA, Neb. (TheStreet) -- The old Shakespearean maxim 'neither a borrower or a lender be' does not apply to Warren Buffett.

The Berkshire Hathaway chief just completed an $8 billion loan deal to help fund his acquisition of Burlington Northern, and some of the cash that Buffett has doled out in recent years has helped companies from Goldman Sachs to General Electric and Swiss Re deal with the worst of the financial crises.

Buffett has already profited handsomely from the Goldman and GE investments. ...

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AIG Shelves Derivatives Portfolio Sale

Thu, 18 Feb 2010 02:37:52 EST

NEW YORK (TheStreet) -- AIG has dropped plans to sell its derivatives portfolio that nearly ruined the insurer in 2008, instead believing that keeping up to $500 billion worth of complex positions could help it survive as an independent entity and repay U.S. taxpayers, a report says.

Peter Hancock, the derivatives expert who has just been hired to oversee AIG's Financial Products division, the unit that bought and sold the portfolio, backs the move, the Financial Times reports.

Following AIG's bailout by the U.S. government, the original plan outlined by then-CEO Edward Liddy and the government was to sell off all the positions and close down AIG Financial Products as soon as possible. ...

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Humana Cuts 1,400 Jobs; Market Approves

Wed, 17 Feb 2010 13:35:14 EST

NEW YORK (TheStreet) -- Humana announced Wednesday that it plans to reduce its workforce by 5%, or about 1,400 positions, over 2010.

The market is responding positively to the measures, pushing up shares of Humana by 2.3% to $47.10.

Humana says the job reduction -- just the latest, of course, of many recent major corporate layoffs -- will mainly come about through attrition, position eliminations and outsourcing, among others. The company says those unable to find another position within Humana will receive severance. ...

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AIG, MetLife Deal Faces Tax Dispute: Report

Wed, 17 Feb 2010 01:45:47 EST

NEW YORK (TheStreet) -- The $15 billion sale of American International Group's foreign life-insurance unit American Life Insurance Co. to MetLife faces a tax dispute hurdle that may require an approval from the Internal Revenue Service, the Wall Street Journal reports, citing sources familiar with the matter.

The dispute under review is whether Alico is exempted from a 2004 IRS ruling which requires insurers to withhold U.S. taxes on income distributed to foreign clients who own their annuities and life-insurance products.

Alico has considered itself exempt from the IRS ruling since it only sells policies to non-U.S. citizens who reside abroad and it earns more than 80% of its income overseas, the Journal reports. ...

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Buffett Becomes Biggest Munich Re Buyer

Fri, 12 Feb 2010 10:14:22 EST

OMAHA, Neb. (TheStreet) -- Warren Buffett and Berkshire Hathaway are now the biggest shareholders in Munich Re, eclipsing the previously biggest stake in the reinsurance company held by money manager BlackRock.

Last month, Berkshire Hathaway revealed that it had built a 3% stake in Munich Re.

Buffett isn't done yet, either, in building up his stake in Munich Re. A regulatory filing indicates that Berkshire Hathaway has options on another 2% of Munich Re that can be exercised by March 11, taking Berkshire's holding in the reinsurer to 7%. ...

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Hanwha Acquires Prudential Units

Fri, 12 Feb 2010 09:16:34 EST

NEW YORK (TheStreet) -- Hanwha Securities has agreed to acquire two South Korean units of Prudential Financial according to Dow Jones newswires.

The reported cost of the acquisition will be about $433.3 million.

Reuters reported that Hanwha Securities has signed a memorandum of understanding to purchase Prudential's units. Details about the terms of the contract were not released. ...

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Ambac's Biggest Holder Unloads

Thu, 11 Feb 2010 18:17:33 EST

NEW YORK (TheStreet) -- Ambac Financial Group's largest stockholder, Third Avenue Management, announced Wednesday in a 13-G filing with the Securities and Exchange Commission that it had disposed of 65% of its holding by Jan. 31.

This disposal of 17.5 million shares, reducing TAM's holding from 9.31% to 3.24%, is very revealing. Should the smaller stockholders, with "blind faith" in the recovery of Ambac, be concerned?

The timing of the sale is a little odd, coming just before the fourth-quarter earnings release, due in early March. Although TAM may have been disposing of the stock since October, at least 2.9 million shares were sold in January. ...

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WellPoint Rate Hike Brings Calif. Probe

Tue, 09 Feb 2010 08:45:52 EST

NEW YORK (TheStreet) -- Wellpoint, one of the most profitable health insurers, has increased its rates and the California state insurance commissioner has launched an investigation.

Citing state law requiring at least 70 cents of every dollar in premiums to be spent on medical care, California Insurance Commissioner Steve Poizner said he was "alarmed by the Anthem Blue Cross health insurance rate hikes." He added, "I have instructed my department to hire an outside actuary to examine their rates line by line," saying he would bring the rates down if they are found to be excessive.

Profit margins for health insurers aren't typically large. The average insurer spent 88% of its premiums, in the nine months to September, on medical expenses. This is before administration expenses tied to this care that averaged 10.5%. The average insurer, therefore, had a 1.56% profit margin through September, before investment income was factored in. ...

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AIG Lands KeyCorp Executive

Mon, 08 Feb 2010 11:57:27 EST

NEW YORK (TheStreet) -- American International Group has poached a new senior executive from KeyCorp to take on key finance responsibilities.

The company on Monday announced the immediate resignation of Peter Hancock, Key Corp's vice chairman. Hancock was responsible for the company's national banking business groups and joined the company in Dec. 2008. He will now be signing on with AIG as the company's executive vice president, finance, risk and investments.

KeyCorp's chief, Henry Meyer, credits Hancock for leading efforts to rebalance the company's business mix, tighten its focus on market opportunities with the best intrinsic value and further its ability to meet clients' needs, all in the midst of one of the most tumultuous periods of financial disruption. ...

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