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Swiss Re CFO to step down; Tryg to buy Danish peer Alka; Sabre sets IPO price

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Swiss Re CFO to step down; Tryg to buy Danish peer Alka; Sabre sets IPO price

S&P Global Market Intelligence offers our top picks of insurance news stories and more published throughout the week.

Guidance

* Legal & General Group Plc CEO Nigel Wilson said the company is on track for a "record year for earnings and profits," citing strong momentum in all its businesses year-to-date.

* Saga Plc shares fell by more than 20% after it lowered its profit forecast. The company expects group underlying pretax profit to grow by just 1% to 2% for the year ending Jan. 31, 2018, driven by more challenging trading in insurance broking, among other factors.

On the deal table

* Legal & General agreed to sell its mature savings division to Swiss Re AG unit ReAssure for £650 million. The formal transfer of the business is expected to complete in mid-2019, subject to regulatory approval and normal conditions.

* Denmark's Tryg A/S agreed to acquire property and casualty insurance firm Alka Forsikrings AS for a total consideration of 8.2 billion Danish kroner. Tryg raised 4.0 billion kroner through the placement of 27.4 million new shares to finance the transaction, which is expected to complete in the first half of 2018.

* Fellow Danish insurer Storebrand ASA acquired all of the A shares and 10,000 B shares in investment manager Skagen AS, corresponding to 90.95% of the latter's share capital and 99.9% of its voting rights. Storebrand will pay 75% of the consideration by issuing its 17,904,091 new shares at a subscription price of 68.24 Norwegian kroner per share, for a total of about 1.22 billion kroner, with the remaining 25% of the consideration to be in cash.

* Meanwhile, Prudential Plc has reportedly asked potential buyers to present offers for a chunk of its U.K. annuities book by Dec. 22, insiders told Sky News, adding that the company would increase the value book to be sold out of its £33 billion annuity book to £13 billion from an earlier reported value of £10 billion. Legal & General Group, Rothesay Life Plc, Pension Insurance Corp. Plc, Scottish Widows Group Ltd. and Aviva Plc are expected to be among the bidders.

Done deals

* Randall & Quilter Investment Holdings Ltd. completed the sale of Lloyd's of London managing agent R&Q Managing Agency Ltd. to U.S.-based medical insurer Coverys, following receipt of all necessary approvals. The sale generated cash proceeds of $22.6 million, which after costs and related incentive and other payments, will result in net proceeds of £13.1 million to Randall & Quilter.

* Aon Plc completed the acquisition of U.K.-based Henderson Insurance Broking Group, which will become part of Aon Risk Solutions UK. Aon has also acquired 100% of Swiss insurance broker Unidelta AG. The financial terms of both deals were not disclosed.

Changing of the guard

* Swiss Re AG CFO David Cole will step down in March 2018, as the company combines the group chief strategy officer and CFO roles, effective April 1, 2018. John Dacey, currently group chief strategy officer, will hold the combined role. Cole will remain a board member at several Swiss Re subsidiaries.

* Michael DeKoning will not renew his contract with Munich Re and will leave as president and CEO of the company's U.S. life business in January 2018. Marc-André Giguère, who most recently led all areas of Munich Re's individual and group reinsurance teams, will become president and CEO of the company's U.S. life and health business, effective Jan. 1, 2018.

* Allianz Group and Liverpool Victoria Friendly Society Ltd.'s joint venture, LV= General Insurance, appointed a new executive team, effective Dec. 28. Liverpool Victoria Friendly Society Chairman Alan Cook will also chair the joint venture, while Steve Treloar will be CEO.

Regulatory corner

* U.K. general insurers should improve how they tackle shortfalls in the catastrophe risk models they use, the country's Prudential Regulation Authority has said following its biennial stress test of the sector. The regulator added that insurers could also improve in identifying the accumulation of exposures, post-loss planning for major events and accounting for how large events affect their capital position for Solvency II.

* The U.K. Financial Conduct Authority fined Bluefin Insurance Services more than £4.0 million for having inadequate systems and controls and for misleading customers about its independence. Bluefin agreed to settle at an early stage of the investigation and received a 30% reduction in its overall fine, without which the fine would have been more than £5.7 million.

In other news

* U.K. private motor insurance firm Sabre Insurance Group plc set the final offer price for its planned IPO at 230 pence per ordinary share. Based on the offer price, the company expects its market capitalization to be £575 million, with the transaction expected to raise net proceeds of approximately £206 million. The flotation should be well-received, equity analysts covering the U.K. nonlife insurance market said, although it could be dampened by further costs from the earlier cut in the personal injury discount rate.

* British ship insurer Britannia reportedly unveiled plans to establish a unit in Luxembourg to ensure it can continue to trade in Europe after the U.K. leaves the EU. The company said it expects to submit a formal application to set up the unit in early 2018, with a view to make it operational by 2018-end.

* Munich Re CFO Jörg Schneider echoed calls to delay the implementation of the new International Financial Reporting Standards 17 accounting rules, saying the change will be costly for insurers and that they would need more time to prepare for it due to its complexity.

Featured during the week on S&P Global Market Intelligence

BoE calls for more derivatives transparency, warns of insurer Brexit concern: The Bank of England has warned courts about a potential influx of applications from insurers looking to resolve issues related to Britain's exit from the EU.

Reinsurers push for more countries to reap benefits of US-EU covered agreement: Reinsurers based outside the EU and the U.S. could be poised to benefit from the covered agreement between the EU and the U.S., regulators and industry professionals said.