QBE Insurance Raises A$2 Billion in Share Sale

QBE Insurance Group Ltd., Australia’s biggest property and casualty insurer, raised A$2 billion ($1.3 billion) to shore up its capital and pay for acquisitions abroad.

QBE, also the biggest manager in the Lloyds of London market, sold 97.6 million new shares at A$20.50 apiece, the company said in a statement to the stock exchange today.

The company said yesterday it would spend $695 million on acquisitions, including U.S. insurer ZC Sterling Corp., to stem slowing profit growth. QBE will also buy two U.S. underwriting agencies and one in Europe.

Chief Executive Officer Frank O’Halloran has made 12 acquisitions this year after a failed A$8.7 billion bid for Insurance Australia Group Ltd.

QBE shares fell 2.2 percent to A$22.50 at the close in Sydney. They were at A$23 yesterday before being halted from trading ahead of the capital raising. QBE has dropped 33 percent this year, compared with a 40 percent slump in the six-company S&P/ASX 200 Insurance Index.

In addition to the A$2 billion share sale to institutions, QBE also plans to swap new five-year senior notes for Tier 1 perpetual securities with a face value of A$1.25 billion at a discount, it said.

Source: http://www.bloomberg.com/apps/news

Life insurance benefits

With the stock market in turmoil, Frank Woodruff, CEO of Sapient Financial Group, finds himself fielding calls from clients worried about their investments daily. Those who have whole life insurance in their mix are relieved that they purchased the high-priced product.

Now clients that shunned whole life years ago because other products offered better returns are looking at the product as stable and predictable — although costs haven’t come down.

“Whole life insurance is an incredibly solid investment,” says Woodruff. “But, back in the ’90s, when the tech stocks were going through the roof, whole life was the whipping boy, because it wasn’t providing as high of a return on investment as some of the riskier investments. Now, whole life is the ‘golden nugget,’” he adds.

Whole life is an insurance policy designed to be a cash reserve that builds up against the death benefit. Policy owners can even borrow against the cash value to help with temporary needs — such as college expenses. The policy’s cash value increases regardless of the performance of the insurance company. The policy also credits interest to the cash value of the account — sometimes resulting in dividends paid to the policy owner. Whole life insurance policies are tax-deferred, and upon maturity of the whole-life policy contract (usually at age 95 or 100), the cash value equals the death benefit.


Source: http://www.bizjournals.com/sanantonio/stories

AIG Injects NT$45.11 Billion Capital Into Taiwan Life Insurance Unit

TAIPEI -(Dow Jones)- U.S. insurance company American International Group Inc. (AIG) has injected NT$45.11 billion (US$1.36 billion) in fresh capital into its 95%-owned Nan Shan Life Insurance Co. as planned, the Taiwanese life insurer said late Friday.

The capital injection by AIG, in proportion to its ownership in the Taiwan unit, is part of Nan Shan's NT$47.22 billion fund raising approved by its board in October, Taipei-based Nan Shan said in an emailed statement.

Nan Shan is Taiwan's second largest life insurer by gross premiums, after Cathay Life Insurance Co.

-By Perris Lee Choon Siong, Dow Jones Newswires; +8862-2502-2557; perris.lee@ dowjones.com

Source: http://money.cnn.com/news/newsfeeds/articles/

insurers reject government bailout help

WASHINGTON (AP) — Two insurance companies have said they will not participate in the government's rescue program to directly invest billions in financial companies.

Some insurers likely would be eligible under the Treasury Department's expanding plan or could apply to acquire thrifts to become so.

Massachusetts Mutual Life Insurance Co. and New York Life Insurance Co., in separate announcements in recent days, said they are financially strong and have sufficient capital to meet their goals without government aid.

As part of the financial rescue plan, the Treasury Department is spending $250 billion to directly buy shares in U.S. banks and other financial companies. Other industries, notably automakers, have been clamoring for a piece of the bailout pie, and the program could be significantly widened in scope.

As things now stand, insurance companies that own thrifts — which are federally regulated — are eligible to apply for the Treasury Department funds.

A spokesman for the Office of Thrift Supervision, William Ruberry, said Friday that several insurers had informally expressed interest in possibly acquiring thrifts since the Treasury aid program was announced in mid-October.

At least a dozen insurers currently own thrifts.

The insurance industry appears to be split between life insurers, some of whom have asked to participate in the program, and property-casualty companies — which have said they aren't interested.

Chubb Corp., a major property-casualty insurer, told Treasury Secretary Henry Paulson in an Oct. 28 letter that "we do not believe that allowing property and casualty insurance companies to participate in the (Treasury program) is consistent with the stated purpose" of the law creating it. That purpose is "to restore liquidity and stability" to the U.S. financial system, Chubb noted in the letter.

In its announcement Friday, Springfield, Mass.-based MassMutual said "we have no intention of participating" in the program.

"MassMutual is well positioned, and has the financial strength and capital necessary to meet the needs of our policyholders and customers despite the current economic environment," the company's statement said.

New York Life said Thursday that it is has "more capital than is required to maintain our Triple-A ratings."

"The company can meet all of its strategic objectives without government capital, its businesses are strong and profitable, and it is committed to remaining a mutual company operating for the sole benefit of its policyholders," New York Life said in a news release.

Source:http://ap.google.com/article/ALeqM5gp6bNR1rr

Economy batters KC Life Insurance

Kansas City Life Insurance Co. reported a $15.2 million third-quarter loss and a 28 percent revenue decrease compared with the same period last year, which it attributed to “the broad and deep economic downturn” and the “recent default and regulatory takeover of high-profile federal agencies and financial institutions.”

In a release late Thursday, the Kansas City-based company (Nasdaq: KCLI) reported a per-share loss of $1.30 for the quarter. Last year, the company reported earnings of $9.1 million, or 77 cents a share.

Revenue for the quarter was $78.1 million, down from $108.8 million last year.

The company said it wrote down $32.5 million in securities during the quarter, resulting in a net impact of $20 million on earnings after taxes and the effect on deferred acquisition costs.

Total new premiums increased 21 percent for the quarter, including a 9 percent increase in individual life sales, a 41 percent increase in immediate annuity premiums, a 19 percent increase in group life insurance sales and a 22 percent increase in new group accident and health premiums.

New deposits for universal life and variable universal life products increased 4 percent. Deposits from fixed deferred annuities decreased 25 percent, and variable annuities decreased 15 percent.

Kansas City Life Insurance ranks No. 21 on the Kansas City Business Journal’s list of area public companies.


Source:http://www.bizjournals.com/kansascity