Danny Wakinshaw reports on the week on insurancetimes.co.uk
The sale of the Royal Bank of Scotland’s insurance division came back into focus last week after the bank was handed £20bn by the Treasury. The government took a majority stake in RBS and bought £5bn of its preference shares as well as underwriting £15bn of ordinary shares.
Insurancetimes.co.uk broke the news that the bank was still in negotiations to sell its insurance arm, which includes Direct Line, Churchill and NIG. It was the most read story of the week.
After the government rescue, an RBS spokesman told Insurance Times it was in the “advanced stages of discussions with a couple of interested parties” over the sale. The bank had slapped a £7bn price tag on the business, but it is unknown what price RBS will now accept.
Days later, FT.com reported that CVC Capital was in talks over a bid.
One casualty of the RBS bail-out was Sir Fred Goodwin, the chief executive. News of his resignation was widely reported online.
Before the government deal was signed, Telegraph.co.uk wrote that Goodwin and Sir Tom McKillop, the RBS chairman, might leave the bank as part of the agreement. “The emergence of an urgent need for capital had placed Sir Fred’s and Sir Tom’s positions under renewed pressure after the bank raised £12bn in the biggest rights issue in European history earlier this year and indicated that it would not need to come back for more,” it said. The departures of Goodwin and McKillop, who retired, were confirmed after the bail-out.
The AIG drama took another turn last week after the US Federal Reserve handed the insurer $37.8bn (£22bn), on top of the $85bn loan that gave the American government control of the company last month. According to The New York Times website, “It promised to sell pieces of itself to repay the loan, and gave the Fed the right to an 80% ownership stake. Now, AIG has gone back to the Fed for $38bn more. The move highlights how little may be left for shareholders.” The news, also reported by Insurancetimes.co.uk, was the second most read story of the week.
Insurance Times’ exclusive interview with AIG’s UK chief, Lex Baugh, was released first on Insurancetimes.co.uk, with Baugh insisting the insurer would not cut rates to win business. Readers were quick to come back the following day for the second part of the interview, in which Baugh said AIG’s rivals would struggle to poach its clients. The full interview was published in last week’s magazine.
Finally, Insurancetimes.co.uk revealed that Oval had secured a £115m bank facility to fund acquisitions. An interview with Phillip Hodson, its chief executive, was released first online, making the headlines.
Most Read stories on insurancetimes.co.uk
The most read stories this week on Insurancetimes.co.uk:
1. RBS: Insurance sale still on
Bank presses ahead with disposal of Direct Line and NIG following part-nationalisation.
2. Fed hands AIG another 37.8bn dollars
Extra money is on top of 85bn dollar loan to US insurance giant.
3. AIG UK: Rivals will not poach business
Lex Baugh insists clients will stay with troubled insurer.
4. Ovals 115m pounds refinance
Broker boosts acquisitions war chest.
5. AIG UK: We are not cutting rates
Lex Baugh in first interview since AIG was nationalised by US government.