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Banking chaos hits insurers
The sub-prime mortgage crisis and credit crunch continue to erode confidence in financial instruments across the board. New York state regulators called on US investment banks, with troubles enough of their own, to devise a rescue plan after leading American bond insurer MBIA lost £1.2 billion in the fourth quarter.
Some confidence returned to hard-pressed European reinsurance giant Swiss Re, when Warren Buffett’s Berkshire Hathaway group took a three per cent stake and struck a commercial alliance with the company. Britain’s Prudential life insurer has come into the limelight again as a possible takeover target for Ping An Insurance, China’s second-largest insurance group (with HSBC a 16.7 per cent shareholder), when the Chinese group moved to raise £11.3 billion to fund a foreign acquisition campaign.
The future of 59 year-old Standard Life chief executive Sandy Crombie is yet again a topic for speculation. He insisted that he would not be forced into naming a date for his retirement after strong succession candidate Trevor Matthews, Standard’s UK retail boss, resigned, with a view to becoming chief executive of rival Friends Provident.
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