Business Moves
Aviva, Prudential
“It takes two to tango,” as the saying goes, and Prudential (U.K.) apparently has no desire to dance with its larger rival Aviva Plc. It hastily rejected a £17 billion ($30 billion) offer one week ago (See Insurance Journal Web site March 20), and has shown no inclination to change its mind.
As a result, Aviva announced that it will abandon its bid to acquire all of the Pru’s shares, and indicated that it doesn’t intend to pursue the matter further. Aviva had been reportedly sounding out some of the Pru’s larger shareholders after the company’s Board rejected its offer. Apparently the response was not encouraging.
The company’s official announcement said that although it “believes that the merger, on these terms, would have created significant value for both sets of shareholders, Aviva made clear that its proposal was dependent on the co-operation of Prudential. As this co-operation has not been forthcoming, Aviva has decided to withdraw its proposal.”
It did reserve the option, in accordance with Rule 2.8 of the City Code on Takeovers and Mergers, to “make or participate in an offer within the next six months in the event that the Board of Prudential agrees to recommend such an offer or a third party announces a firm intention to make an offer for Prudential.”
According to published reports, however, Aviva’s CEO Richard Harvey sees little chance of the acquisition proposal being revived.
XL Re Life, U.S. Life Reinsurance
XL Re Life acquired Servus Life Insurance Co., expanding its U.S. life reinsurance market. Servus Life will be renamed XL Re Life America Inc. following state regulatory approvals.
XL Re Life America Inc. will offer reinsurance capacity for individual life reinsurance and in force portfolios on a yearly renewable term (YRT) or coinsured basis, as well as individual reinsurance capacity on a facultative underwriting basis.
XL Re Life America is led by President and CEO Andy Batley. The team, based in Stamford, Conn., includes Chief Actuary William Reifenberger, Chief Underwriter M. Cristina Downey and Head of Administration Thomas Hartlett.
A.M. Best Co. assigned a financial strength rating of “A” and an issuer credit rating of “a” to XL Re Life America Inc. of Stamford, Conn. The outlook for both ratings is stable.
Since its inception in 1999, XL Re Life’s operations have grown to more than $6 billion in assets with teams now based in Stamford, Conn., London, Bermuda and Paris.
Lincoln National,
Jefferson Pilot
Shareholders of Lincoln National Corp. approved a $7.5 billion acquisition of rival Jefferson-Pilot Corp. With the transaction expected to close in early April, the Philadelphia-based insurance and investment products company, under the name Lincoln Financial Group, said 98 percent of shares that voted approved the issuing of shares to complete the purchase. Shareholders also gave the acquisition a nod, with more than 85 percent of shares voting in favor of the deal.
The combined company, with 2004 revenue totaling $9.5 billion, will base its headquarters in Philadelphia.
A Lincoln spokesman said the company has yet to determine how many jobs will be cut.
Last month, three directors decided to resign from Lincoln, although the company denied that it was due to any disagreements at a Securities and Exchange Commission filing.
Marcia J. Avedon, Jenne K. Britell and Ron J. Ponder submitted their resignation contingent on the completion of the Jefferson-Pilot’s acquisition. After the deal closes, Lincoln will expand its board to 15 directors from 12, with seven coming from Jefferson-Pilot.
Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Hartford Fire Insurance, Risk Management Solutions
Risk Management Solutions, a provider of products and services for the management of natural hazard risk, said its independent risk analysis of securitized collateral has enabled Hartford Fire Insurance Co. to purchase reinsurance cover supported by the issuance of $105 million Class D notes issued by Foundation Re from its $750 million catastrophe bond program.
The notes, along with proceeds from previously issued offerings, will serve to provide HFIC with a source of indexed cover for earthquake and hurricane losses in the United States over a four-year period, as determined by the Property Claims Service.
Each class of notes covers a proportional share of layered earthquake and hurricane losses. Due Feb. 24, 2010, the notes were assigned a “BB” senior secured debt rating by Standard & Poor’s.
The RMS peril model assessment of underlying assets of the notes applied weightings according to risk exposure by state and by line of business. They cover a 26.25 percent quota share of catastrophic earthquake and hurricane index losses in the range of $1.34 billion to $1.74 billion. The RMS analysis determined that they have an annual probability of attachment of 1.59 percent and a four-year probability of attachment of 6.21 percent.
AIG, Travel Guard
American International Group Inc. announced a wholly-owned subsidiary company is acquiring Travel Guard International, a national provider of travel insurance programs and emergency travel assistance, from the Noel Group of Stevens Point, Wis. Financial terms of the acquisition were not disclosed.
Travel Guard International covers more than 6 million travelers worldwide each year. As part of the transaction, AIG will also acquire Mercury International, Travel Guard Americas and the Travel Guard Canada brands from the Noel Group.
Hull & Co., High Country
Insurance Managers
Hull & Co. Inc. acquired the assets of High Country Insurance Managers LLC, which has offices in Lakewood, Colo.
The staff will continue to operate under the High Country brand from their Lakewood location. The acquisition does not affect Hull’s current Denver operations run by Ralph Robinson.
Hull & Co. Inc. is a wholly-owned subsidiary of Brown & Brown Inc., which offers insurance and reinsurance products and services, as well as risk management, third-party administration, and managed health care programs. Web site: www.bbinsurance.com
Safeco
Safeco, Seattle, revised the real estate strategy for its Puget Sound operations that calls for the company to lease space rather than build and own office facilities. That is a lower-cost solution that also provides the company with flexibility to pursue telecommuting and virtual workplace alternatives, the company said.
Under the new plan, Safeco intends to place its University District building complex on the market and lease space in downtown Seattle for headquarters employees. The company will not consolidate Puget Sound operations in the U-District as previously announced. The sale of the company’s Redmond campus will move forward, and employees who currently work on the campus will relocate to a yet-to-be-determined Eastside site by 2008. Approximately 700 employees will continue to work in leased space in the U-District.
Safeco will begin immediately to evaluate office space availability in downtown Seattle and on the Eastside. The company is working to determine its square-footage requirements for each new location and expects the site evaluation process to take several months to complete.
Employers Insurance Group,
PGA Tour
The Reno-based Employers Insurance Group is providing a sponsorship that the Reno-Tahoe Open organizers say should help secure the tournament’s spot on the PGA Tour for several more years.
Employers Insurance Group will provide from $250,000 to $500,000 for the 2006 tournament while the search continues for a title sponsor willing to put up about $1.5 million. The Reno-Tahoe Open, first played in 1999, is not listed on the PGA Tour schedule beyond the event set for Aug. 24-27.
“We’re going to be on the schedule next year,” tournament director Jim Kline said during a news conference at the Montreux Golf and Country Club. “In the near future – and I mean real near future – we’ll get offered a contract for the next six years.”
The tournament’s future has been uncertain since the PGA Tour announced plans to change its schedule beginning in 2007 to include a fall series of events following three tournaments that will makeup the FedEx Cup Championship Series.
Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
The Hartford Financial Services
Following similar announcements in Indiana and Utah, The Hartford Financial Services Group Inc. will offer lower auto insurance prices to many Nevada drivers under its Dimensions personal auto insurance program, which is available through the company’s network of independent agents.
The price adjustments are designed to make the plan more competitively priced for many of Nevada’s 1.6 million drivers. The changes should enable agents and the company’s front-line representatives to reach a greater number of customers with benefits that include:
•Annual savings of approximately $50 or more for many customers.
•Additional discounts for most customers when they purchase a companion homeowner’s insurance policy.
•Changes effective April 4, 2006, for new policies and May 1, 2006, for renewal business.
The Hartford Financial Services Dimensions program is available in 41 states.