Posts Tagged ‘valuation’



April 11th, 2017

Assessing Insurers in a Period of Rapid Change: Insurance Equity Analyst Survey 2016

Posted at 1:00 AM ET

Guy Carpenter has collaborated with Mercer to survey insurance equity analysts to understand the possible objectives and aspirations of insurance company shareholders. Incorporating or at least considering the views of various stakeholders will be critical for insurers in ensuring that they are moving along the right path, especially in this uncertain environment.

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September 17th, 2015

Disruptive Forces to M&A Activity

Posted at 1:00 AM ET

The reality is that many external forces continually disrupt the impact on merger & acquisition (M&A) activity of the insurance pricing cycle. This is especially true in recent years as insurance markets are influenced by wider financial conditions, new investors, globalization and the benefits of healthy profits despite a prolonged period of rate softening. These disruptive forces provide both positive and negative contributions to the M&A-conducive market conditions resulting from the current stage in the insurance cycle.

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October 3rd, 2013

Convergence Capital’s Effect on Valuations

Posted at 1:00 AM ET

Figure F-4 highlights the relative share price performance of the reinsurance sector since January 2012, which can be considered the start of the new wave of convergence capital. The clear upward trend has benefited investors during this time.

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September 8th, 2013

Capital Stewardship

Posted at 1:00 AM ET

potter_des_bioDes Potter, Head of GC Securities (EMEA)

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Faced with an abundance of excess capital, negligible growth in global reinsurance spend and the pricing outlook continuing to soften, one of the biggest challenges for reinsurers is deciding how to deploy excess capital to generate a return that meets or exceeds the expectations of shareholders.

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October 22nd, 2012

Baden-Baden Reinsurance Symposium Considers the Opportunities and Threats Created by Volatility

Posted at 1:00 AM ET

Guy Carpenter  hosted “Volatility - Opportunity or Threat?” the Reinsurance Symposium held in Baden-Baden on October 21. The event examined how volatility is viewed within the insurance and reinsurance sectors, particularly from a financial perspective, and explored the potential which market turbulence can generate.

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October 18th, 2012

Maximizing Value with Guy Carpenter

Posted at 4:33 PM ET

The three key risks outlined in Guy Carpenter’s report: Overcoming Key Risks on the Road to Profitable Growth, Mid-Year Market Overview help explain the persistent low valuations experienced by many companies in the sector. It is apparent that nearly all P&C carriers are affected directly by at least one of these risks. In Guy Carpenter’s role as trusted strategic advisor, there are many opportunities to assist clients in addressing these issues.

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October 17th, 2012

Resilient Capital Levels

Posted at 1:00 AM ET

David Flandro, Global Head of Business Intelligence, Julian Alovisi, Assistant Vice President and Lucy Dalimonte, Senior Vice President
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Another driver of low valuations has been sector book value or capital growth (the denominator in the price-to-book ratio). Figure 1 shows the increase in reported capital since the middle of 2011 for the Guy Carpenter Reinsurance Composite. This growth has been particularly impressive as the sector experienced an exceptional series of costly catastrophe losses during this time. Yet, as the primary sources of capital growth are net income and unrealized gains, it is important to ask: how tangible and sustainable are these sources of growth?

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October 16th, 2012

Chart: Valuations Remain at Long-Term Low

Posted at 9:08 AM ET

With the sector exposed to a debt crisis, emerging catastrophe risks and a deteriorating reserving cycle, it should come as no surprise that valuations stand at or near 20-year lows. As shown in Figure 1, reinsurers’ average price-to-book ratios remained near 0.90 during the first half of 2012 - approximately one and half standard deviations below the 20-year mean.

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May 21st, 2012

Chart: Reinsurance Valuations at a Long-Term Low

Posted at 1:00 AM ET

The challenging macroeconomic environment of subdued growth and low interest rates meant the reinsurance sector ended 2011 trading near 20-year lows. As the chart below illustrates, the average price to book ratio for the sector of 0.893 is just greater than one and a half standard deviations down from the 20-year average of 1.32.

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March 14th, 2012

Capital Management: Reinsurance Valuations at a Long-Term Low

Posted at 1:00 AM ET

The challenging macroeconomic environment of subdued growth and low interest rates meant the reinsurance sector ended 2011 trading near 20-year lows. As Figure 1 illustrates, the average price to book ratio for the sector of 0.893 is just greater than one and a half standard deviations down from the 20-year average of 1.32. The sovereign debt crisis, threat of a double-dip recession, heavy non-peak zone catastrophe losses during 2011 and concerns about reserve adequacy are among the factors contributing to volatility and low valuations. Additionally, despite the heavy losses incurred during 2011, many reinsurers are still perceived to have excess capital relative to projected earnings and top-line growth.

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