Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

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Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Categorized | Insurance

Japan’s MS&AD to extend spending spree

Posted on November 14, 2016

MS&AD, Japan’s largest non-life insurer, is poised to extend its multibillion-dollar overseas acquisition spree, eyeing a range of targets in the US and Southeast Asia, its chief executive says.

The focus on deals comes as the Japanese group also looks to extend its range of products into insurance for self-driving cars and coverage against cyber attacks as the industry grapples with the implications of new technology.

MS&AD’s appetite for deals was not sated by last year’s $5.3bn purchase of Amlin, the British insurer, and highlights the sense of urgency within the Japanese financial services sector to seek growth beyond the shrinking domestic market.

“To become a global player, we need about 50 per cent [of total profits to come from overseas]. While organic growth will gradually increase its weight, we need to carry out M&A to achieve 50 per cent,” Yasuyoshi Karasawa, MS&AD chief executive, told the Financial Times in an interview.

Since Mitsui Sumitomo’s acquisition of Amlin in February, the Japanese group now generates about 25 per cent of its profits from overseas insurance businesses, building on its traditional strengths in Malaysia, Singapore, Thailand and the Philippines.

Over the past three years, Japanese insurers have racked up $37bn of outbound dealmaking, according to Dealogic, and, together with Japan’s banks and asset managers, combined to make 2015 a record year for overseas acquisitions.

Mr Karasawa said the group will continue to focus on strengthening its footholds in Lloyd’s of London, Southeast Asia, India and China. But the company will also aim to grab a bigger share in the US — the world’s largest insurance market and the home-base of Amlin’s speciality marine insurance business, he said.

MS&AD’s greater focus on the US will see it, in acquisition terms, playing catch up with its main Japanese rivals. While Mr Karasawa’s company was absorbing Amiln, Tokio Marine paid $7.5bn for HCC in the US last year while Sompo Holdings agreed to acquire Bermuda-based rival Endurance Specialty Holdings for $6.3bn last month.

In common with the rest of Japan’s financial services sector — and as the acquirer of a British company shortly before the country’s June referendum on Europe — Mr Karasawa said he was closely monitoring the effects of Britain’s withdrawal from the EU.

Although he said MS&AD’s European businesses — including offices in Germany, the Netherlands, Belgium and France — were positioned for resilience to any negative effects of Brexit, he warned that risks lay in the reputation of London as a global financial hub.

“If the City’s standing gradually declines with Brexit, we may need to consider a relocation,” Mr Karasawa said.

Mr Karasawa has taken some advantage of Brexit and market assumptions about its likely effect on MS&AD’s UK business via Amlin. Shortly after the referendum, MS&AD’s shares plummeted to an 18-month low and remained depressed in the months that followed. In late October, MS&AD announced a ¥30bn ($282m) share buyback plan that was three times bigger than the market had expected.

MS&AD is also expected to make further investments in disruptive technologies as the group prepares new products around cyber security and self-driving vehicles. While offering significant opportunities, executives caution that the new products must be handled with care because there is uncertainty on how much the insurance industry can cover for the risks.

Richard Hextall, Amlin’s chief finance and operations officer, said: “We are writing little bits of cyber insurance to help us understand but we are careful about controlling the downside risk. But over time, that’s got a huge potential as an insurance product.”