The insurance industry continues to face major challenges.
The insurance industry has faced major challenges through the financial crisis, with declining asset values and increased credit risk putting pressure on capital buffers. For insurers in Europe, the implementation measures for Solvency II remain uncertain and the eurozone crisis adds further issues. Regulatory change is also a theme in many other parts of the world.
Throughout these developments our insurance team has advised insurance companies, investment banks and other financial institutions on various actions to manage assets and liabilities and mitigate larger risks. We have been active in advising on M&A, distribution arrangements, bulk purchase annuity work and longevity transactions. Our longevity work was recently recognised by our winning the Most Innovative Firm in Corporate Law award at the Financial Times Innovative Lawyers Awards 2012 for our longevity deals for pensions funds and pension solution providers.
Our clients gain the benefit of expert advice from global specialists in corporate insurance, M&A, litigation, restructuring and insolvency, capital markets, tax, employment and regulatory matters.
We continue to lead the market through innovation in relation to structures which achieve the right effect both under current regulations and (the current shape of) Solvency II. We have advised on capital raising, including contingent loan transactions, rights issues and on hybrid capital and senior bond issues.
With asset values low and regulatory uncertainty high globally, we expect to see opportunities for M&A, whether as a result of insurance companies divesting their non-core assets or others, such as banks, selling their insurance arms. Raising or optimising regulatory capital remains a key issue and we expect to see liquidity (starting with the banks) potentially driving M&A.
To discuss legal issues with Linklaters’ global insurance team, please contact Victoria Sander, Wolfgang Krauel, Matthew Middleditch, Scott Sonnenblick, Duncan Barber or Dan Schuster-Woldan.
Recent insurance transactions include advising:
- the underwriters on the IPO of Direct Line Insurance Group
- AXA on the acquisition of HSBC's general insurance business in Hong Kong, Singapore and Mexico, and on bancassurance agreements in Hong Kong, Singapore, India, Indonesia, China and Mexico
- PICC Property & Casualty Co., Ltd. on its RMB5.002bn rights issue
- Groupama SA on the sale of Groupama Insurance Company Limited to Ageas (UK) Limited
- the managers on the issue by Aviva of US$650m fixed rate Tier 1 notes - its first issue of Tier 1 securities since 2004
- New York Life Insurance Company on the sale of its insurance businesses in China, Hong Kong, South Korea and Thailand
- on the US$20bn offering and listing of AIA Group
- Old Mutual on the sale through its UK subsidiary Skandia Life Assurance Company Limited of its Finnish life branch
- Credit Suisse on the Ping An Insurance RMB29.1bn acquisition of Shenzhen Development Bank
- Meiji Yasuda Life Insurance Company on a strategic alliance with Talanx AG, Germany
- Allianz on the issue of €500m convertible Notes with scheduled maturity in 2041 and with contingent mandatory conversion (the first "coco" issued by a European insurer)
- the trustees to the Rolls-Royce Pension Fund on a £3bn longevity swap entered into with Deutsche Bank