Continue reading Reinsurance Rates Off up to 15% for January Renewal

Reinsurance Rates Off up to 15% for January Renewal originally appeared on BloggingStocks on Thu, 31 Dec 2009 10:00:00 EST. Please see our terms for use of feeds.

A rapidly hardening property insurance market in the first half of the year slowed down a little bit in the third quarter, according to insurance broker Aon (AOC). Property rates increased 4% to 5% on average, with some corners of the market surging more than 20%, during the first half 2009. In the third quarter, rates were up an average of only 0.2%.

Low levels of insured loss have contributed to strong profits for property carriers, and the industry's surplus is up $463 billion -- all of which means there is little reason to pump up insurance rates. Rates should remain stable for the rest of the year.

Continue reading Property insurance rates to remain stable through end of year

Property insurance rates to remain stable through end of year originally appeared on BloggingStocks on Sat, 05 Dec 2009 13:40:00 EST. Please see our terms for use of feeds.

There's only one month left. If it can pass with no major catastrophic rocket failures, the space insurance sector will look back on a fantastic -- and profitable -- 2009. Insurance for this market can be a tough business, as failures are frequent, and the cost to launch can reach (or even exceed) $250 million. So, it's not always easy to eke out a profit.

Aon (AOC) International Space Brokers forecasts space insurance sector profits of above $400 million this year, making it another strong annual performance for this line. The space carriers have sustained losses of $400 million to $450 million in 2009, but premiums paid to the insurers exceeded $800 million for the first three quarters of the year.

Continue reading Space insurance sends profits to the stars

Space insurance sends profits to the stars originally appeared on BloggingStocks on Tue, 01 Dec 2009 12:30:00 EST. Please see our terms for use of feeds.

Continue reading Before the bell: Stocks head higher; FRE, LEH, AAPL, FL, PSUN, GPS ...

Before the bell: Stocks head higher; FRE, LEH, AAPL, FL, PSUN, GPS ... originally appeared on BloggingStocks on Fri, 22 Aug 2008 08:16:00 EST. Please see our terms for use of feeds.

Willis Group Holdings (NYSE: WSH), the third largest insurance broker, is about to become much bigger. Yes, the company has announced a $2.1 billion acquisition of Hilb Rogal & Hobbs (NYSE: HRH). The transaction is half cash and half stock. Although, Willis plans a $1 billion buyback to sop up the shares.

Based on the financials, the deal looks smart. Willis plans to realize annualized synergies of about $140 million by 2012. What's more, the transaction should be accretive to cash earnings on the close (which is expected in the Q4).

More importantly, Willis is likely to boost its growth. After all, there will be a doubling of North American revenues. There will also be a stronger footprint in New York, Boston, New Jersey, California, Florida, Philadelphia and Illinois. In other words, expect more pressure on McLennan Cos. (NYSE: MMC) and Aon (NYSE: AOC).

Something else: HRH will add expertise in key areas like personal lines, healthcare, environmental and executive risk.

No doubt, Willis is engaging in a transformative acquisition. The deal is the biggest in the sector since Marsh & McLennan's purchase of Sedgwick Group in 1998.

There are definitely some big risks for Willis.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Willis brokers a $2.1 billion deal for Hilb originally appeared on BloggingStocks on Mon, 09 Jun 2008 12:37:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY: Google, Boyd Gaming and Microsoft were today's noteworthy initiations:

• Kaufman Bros. believes Google (NASDAQ: GOOG) has "only begun to scratch the surface" of its local market opportunity. Shares were assumed with a Buy rating and $680 target.
  
• Banc of America believes Boyd Gaming (NYSE: BYD) will face financing challenges with its Echelon resort, and initiated shares with a Sell rating and $14 target.
  
• Lehman reinstated Microsoft (NASDAQ: MSFT) with an Equal Weight rating and $34 target based on peaking Vista/Office 2007 cycles, uncertain online strategy, and increased investment.

OTHER INITIATIONS:

• Goldman started AON Corp. (NYSE: AOC) with a Neutral rating.
  
• Broadpoint initiated Covanta (NYSE: CVA) with a Buy rating and $32 target.
  
• Companhia Vale Do Rio Doce (NYSE: RIO) was assumed at Citigroup with a Buy rating and $48 target.

Analyst initiations: Google, Boyd Gaming, Microsoft originally appeared on BloggingStocks on Wed, 07 May 2008 11:54:00 EST. Please see our terms for use of feeds.

Aon (NYSE: AOC) thinks that risk brokerage and consulting has the best future, in terms of margins and growth.

To that end, the company announced Monday that it is selling off its underwriting businesses. Combined Insurance Company was sold for $2.4 billion to ACE Limited (NYSE: ACE), while Munich Re bought Aon's Sterling Life segment for $352 million.

Yes, even in the massive insurance business, this is a good chunk of change for Aon.

Continue reading Aon unloads underwriting units for $2.75 billion

Aon unloads underwriting units for $2.75 billion originally appeared on BloggingStocks on Tue, 18 Dec 2007 10:40:00 EST. Please see our terms for use of feeds.

Continue reading Before the bell: Futures decline as concerns over economy grow

Before the bell: Futures decline as concerns over economy grow originally appeared on BloggingStocks on Mon, 17 Dec 2007 07:47:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Citigroup upgraded shares of Dick's Sporting (NYSE: DKS) to Buy from Hold based on valuation, margin expansion and increased visibility.
• Ericsson (NASDAQ: ERIC) was raised to Buy from Hold at WestLB on valuation following yesterday's sell-off. The firm feels investors need to look beyond 2008.
• Lehman upgraded shares of Deutsche Telekom (NYSE: DT) to Equal Weight from Underweight as they believe earnings momentum will be seen in the near-term.

• UBS upgraded Nova Chemical (NYSE: NCX) and Orient-Express (NYSE: OEH) to Buy from Neutral.
• Office Depot (NYSE: ODP) was upgraded to Neutral from Underperform at Credit Suisse.
• Goldman upgraded AON Corp. (NYSE: AOC) to Buy from Neutral.

Analyst upgrades: DKS, ERIC and DT originally appeared on BloggingStocks on Wed, 21 Nov 2007 09:45:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Negotiations continued last night on a new labor agreement between Chrysler and the UAW, but it is unclear if an agreement will be reached by today's 11am deadline, reported the Wall Street Journal (subscription required).
• MGM Mirage (NYSE: MGM) is today expected to announce plans to build a $5B resort in Atlantic City, NJ that will be completed in 2012, reported the Wall Street Journal.
• The CEO of Swiss pharmaceutical company Roche Holding (OTC: RHHBY), Franz Humer, said he has no intention of increasing his company's $75 per share bid for U.S. diagnostics company Ventana Medical Systems (NASDAQ: VMSI), and is "very confident" that the offer will succeed, reported the Financial Times (subscription required).

• Crain's Chicago Business reported that Aon Corporation (NYSE: AOC) has won back the insurance brokerage business of Sears Holdings Corporation (NASDAQ: SHLD).

• Harry Reid, the Senate Majority Leader, confirmed that there's little chance this year -- due to a crowded legislative calendar -- that there will be legislation to increase taxes on the private equity industry, reported TheDeal.com (subscription required).

Newspaper wrap-up: MGM to build a $5B resort in Atlantic City originally appeared on BloggingStocks on Wed, 10 Oct 2007 09:15:00 EST. Please see our terms for use of feeds.

Insurance and risk management company Aon Corporation (NYSE: AOC) is posting good returns in all three business units on the three most important quantitative metrics: organic growth, margin expansion, earnings improvement. The stock is worth considering as part of a balanced value-income portfolio. Its P/E multiple is just above industry standard, but its EPS is 50% above industry average. Even with a market cap in excess of $12 billion, AON stock still returns 10% quarterly growth year over year, far in excess of industry standard. The stock has already appreciated in price more than 15%, opening the year trading at $35.39 and closing on June 12 at $41.80.

Aon Corporation recently reported very good 1Q 2007 earnings. Revenue was up 10% for the quarter to $2.4 billion, 5% of which was due to organic growth. Net income increased 8% to $213 million or EPS of $0.66. Net income from continuing operations rose 23% to $212 million. Aon posted these numbers despite a tough North American market in which rising health care costs have put pressure on medical insurance and risk management companies. During this quarter, Aon realized restructuring savings of $46 million and is on track to realize FY 2007 savings of $235 million and FY 2008 savings of $280 million. The company also repurchased $345 million of its stock and has authorization from its board to repurchase up to $2 billion of its stock.

The Risk and Insurance Brokerage Service segment posted an impressive 8% gain in revenue due to new US business and 8% in Asia Pacific. Overall, this unit posted a 6% revenue increase despite soft markets in the UK and Australia. The Consulting unit increased revenue by 7% to $329 million despite the termination of large outsourcing contracts. The Insurance Underwriting unit grew revenue by 16% to $574 million, up $79 million from 1Q 2006. At the same time as it posted organic growth revenues, Aon Corporation also increased policyholder benefits 27% to $323 million. Clearly, Aon Corporation has developed a profitable business strategy even in the midst of a challenging economic and political environment regarding health care insurance costs.

Aon Corporation ensures good earnings originally appeared on BloggingStocks on Wed, 13 Jun 2007 13:30:00 EST. Please see our terms for use of feeds.