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Building Better Mousetraps: Technology Imperatives To Fight Fraud | PropertyCasualty360

Building Better Mousetraps: Technology Imperatives To Fight Fraud | PropertyCasualty360 | Property & Casualty Insurance | Scoop.it
Insurance fraud may cost the P&C industry $80 billion annually by 2015. To disarm increasingly ambitious fraudsters, insurers must harness the sophisticated tech tools at their fingertips.
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SNL: Data Dispatch: Insurance M&A scoreboard Q2'13 | SNL

SNL: Data Dispatch: Insurance M&A scoreboard Q2'13 | SNL | Property & Casualty Insurance | Scoop.it
Stephen Applebaum's insight:

                                                              

Tuesday, August   06, 2013 3:06 PM ET      
  Insurance M&A   scoreboard Q2'13

By Adam Cancryn and Jan Haider Kiani

 

The insurance industry trudged through its slowest   dealmaking period in recent history during the second quarter, signaling   companies' continued reluctance to expand amid sluggish economic conditions.

Underwriters and brokers combined announced just 60 deals in the   quarter, SNL data show. That is the lowest total since at least the financial   crisis, and perhaps in close to two decades. SNL historical records indicate   that the last time the M&A market was this inactive was the fourth   quarter of 1996, nearly 17 years ago. However, that may not take into account   certain foreign or multi-industry transactions, or second-quarter deals that   firms have not yet reported.

The low deal count nevertheless lengthened an   M&A       drought that has   persisted throughout this year. Insurers in the property & casualty and   life sectors are focused on reinforcing and reorganizing their existing   businesses rather than expanding into new ones, industry participants told   SNL, leaving little appetite for large-scale consolidation.

         

 

Instead, companies are largely using M&A as a means   to divest unwanted segments or quickly cut costs. Insurers have slimmed down   their life operations in particular in past years, shedding annuity and other   books of business weighed down by near-record-low interest rates. The Hartford Financial Services   Group Inc. during the second quarter agreed to sell Hartford Life   International Ltd. as part of its broader       streamlining effort,   shipping it to a Berkshire Hathaway Inc. subsidiary   for $285 million. Allstate Corp. shortly   after quarter-end said it would also deal one of its life insurance   units, selling Lincoln Benefit Life Co. to   private equity firm Resolution Life Holdings Inc. in a $600 million transaction.

Finding buyers, however, can be difficult when much of   the sector is selling the same types of businesses. Private equity firms have   almost       exclusively served as   the suitors for fixed and variable annuity blocks while insurers sit on the   sidelines. That smaller, nontraditional pool might make it more difficult to   find an appropriate partner and do a deal at the same pace as in the past,   PricewaterhouseCoopers LLP Transaction Services Partner John Marra told SNL.

 

         

"For someone who's signaled, it could be a year   before they're able to do a sale," he said. "I think private equity   is maybe led more by financial objectives, supported by strategic objectives,   and therefore the processes in general take longer."

 

Private equity's affair with the life sector has       attracted much of   the attention of late, given firms' willingness to take on costly interest rate-sensitive   units in hopes they become more profitable down the road. But the sector also   made a couple moves within the reinsurance industry. Stone Point Capital in   the second quarter partnered with Enstar Group Ltd. on deals for   Bermuda-based companies Atrium Underwriting Group Ltd. and Arden Reinsurance Co. Ltd.

 

Property & casualty dealmakers have had little such   luck. The sector over the last two years has shared life insurers'   contractionary attitude, aiming to stabilize its profit margins in lieu of   chasing growth.

Companies raised prices across various business lines,   narrowed their exposures and modified their existing products. But those   profit-boosting tactics rarely involved M&A. P&C insurers have shied   away from much risk-taking, opting instead to spend money on internal   initiatives and shareholder-pleasing stock buybacks. Even as industry valuations recovered, Aite   Group senior analyst Stephen Applebaum said that the still-shaky economy has   prevented many companies from pulling the trigger on a large deal.

         

"If it wasn't   for Travelers and Dominion, we wouldn't have much to talk about," he   told SNL, referring to Travelers Cos. Inc.'s   $1.10 billion deal for E-L Financial Corp. Ltd.'s Dominion of Canada General   Insurance Co. "I don't expect to see any more or much   more of that sort of activity."

Applebaum added   that Travelers found in Dominion the rare partner that could instantly expand   its footprint and provide it with a valuable foreign revenue stream. Dominion   in turn wanted a partner like analytics-focused Travelers that could bring   its technology and systems up to date, making for a seemingly perfect   strategic combination.

Few believe there   are other major marriages on the immediate horizon. But there is a bit more   optimism for 2014, when companies might wrap up their pricing actions and set   their sights once again on growth. P&C insurers are sitting on massive   amounts of cash, and the share buybacks that they leaned on heavily are less   effective as stock valuations rise. Should the economy remain upright and the   weather calm, Applebaum forecast a string of big deals.

         

"2014,   barring any shocking economic or terrorist-type development, is probably   going to be an M&A year that I predict will beat 2010 in both deal count   and value," he said. "The domestic market is really competitive.   Organic growth is like trying to win a baseball game on singles. It's really,   really hard."

 

There is similar sentiment on the life side, in that   there are so many properties up for sale that deals are inevitable. The   question is how fast they move through the pipeline and who is at the   receiving end. A significant       uptick in interest   rates could speed insurers' return to the market as buyers, though likely   more for traditional life businesses than annuities. And private equity firms   appear committed to becoming major players within the sector for the near   future. There might not be many massive mergers, but there could be a steady   stream of block deals

throughout the second half.

 

"This is the new annuity world," Marra said.   "You have buyers that are looking for a very narrow block of business   acquisition, and sellers that are looking for a very narrow exit."

Among brokers, the market is driven less by the economic   factors that have dogged underwriters. Rather, industry participants   characterized the relatively quiet 41-deal second quarter as a collective   regrouping. Tax changes at the end of 2012 drove a flurry of deals before the   New Year, exhausting acquisitive companies' deal prospects. They then spent   the first six months finding new acquisition prospects, work that should pay   off during the third and fourth quarters.

 

"The pipeline is very robust, and we expect to have   a number of mergers close in the second half of 2013," Arthur J. Gallagher & Co. Chairman,   President and CEO J. Patrick Gallagher Jr.       said during a   second-quarter earnings call. "They come at their own pace. … Each one   is different, each one has its own personality."

 

Private equity firm Madison Dearborn Partners LLC's takeout of National Financial Partners Corp. made   a big splash in the brokerage space during the second quarter, along   with Brown & Brown Inc.'s   $360.0 million deal for Beecher   Carlson Holdings Inc.

                            

 

    

Copyright © 2013,   SNL Financial LC 
  Usage of this product is governed by the License Agreement.
 
  SNL Financial LC, One SNL Plaza, PO Box 2124, Charlottesville, Virginia 22902   USA, (434) 977-1600

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Are Insurance Technology Vendors Meeting the Industry's Needs? - Insurance & Technology

Are Insurance Technology Vendors Meeting the Industry's Needs? - Insurance & Technology | Property & Casualty Insurance | Scoop.it
Are Insurance Technology Vendors Meeting the Industry's Needs?
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Technology vendors need to innovate, align solutions with carrier needs

Technology vendors need to innovate, align solutions with carrier needs | Property & Casualty Insurance | Scoop.it
Technology vendors must do a better job of aligning their solutions with the needs of property and casualty insurance carriers, notes a new report from Boston-based Aite Group.
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Revved Up GM, Ford Drive Deep Into China Auto Market

Revved Up GM, Ford Drive Deep Into China Auto Market | Property & Casualty Insurance | Scoop.it
GM and Ford, buoyed by healthy U.S. sales, are well positioned to add to expanding gains in China, the world's largest auto market.
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Alignments and Disconnects between Insurance Technology Vendors and P&C Carriers: A New Report from Aite Group - Technology in Insurance - Insurance-Canada.ca

Alignments and Disconnects between Insurance Technology Vendors and P&C Carriers: A New Report from Aite Group - Technology in Insurance - Insurance-Canada.ca | Property & Casualty Insurance | Scoop.it
Now more than ever before, technology is impacting the insurance industry and forcing transformation, and vendors need to do a better job of aligning their solutions with P&C insurance carrier needs.
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Insurance Leaders Must Collaborate to Achieve Analytics Value - Insurance & Technology

Insurance Leaders Must Collaborate to Achieve Analytics Value - Insurance & Technology | Property & Casualty Insurance | Scoop.it
Insurance Leaders Must Collaborate to Achieve Analytics Value
Insurance & Technology
This is an insightful question business and technology leaders need to examine. Yes, the drive toward accountability is definitely a collaborative effort.
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P&C Vendors Missing Risk Management, Innovation Opportunities

P&C Vendors Missing Risk Management, Innovation Opportunities | Property & Casualty Insurance | Scoop.it
While vendors are optimistic about revenue growth over the next few years, a new report from Aite Group urges them to do a better job of aligning with P&C carrier needs.
Stephen Applebaum's insight:

Is your insurance claims operation missing these opportunities?

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