RSA Insurance purchased by Intact and Tryg for $9.6bn
RSA, which was formed in 1996 through the merging of Sun Alliance and Royal Insurance, is listed on the LSE and the FTSE 100. Serving over nine million customers in more than 100 countries and with £6.4bn in net written premiums as of 2019, the company enjoys a strongly rooted status as an insurance leader.
Speaking in The Guardian, Martin Scicluna, Chairman of RSA, , “The board of RSA is pleased to be recommending Intact and Tryg’s cash offer for the company, which delivers attractive, certain value for shareholders.
“RSA has provided peace of mind to individuals and protected businesses from risk for more than 300 years. However, I am confident that the values of our business, and not least our dedication to serving customers well, will be sustained as part of Intact and Tryg.”
There are obvious territorial gains to be made by both Intact and Tryg respectively - the former would gain RSA’s Canadian and UK operation while the latter secured Sweden and Norway.
Although it may still be early to declare these events an emerging trend, the proximity and high-profile nature of the acquisitions could indicate that insurance markets are generating significant investment interest.
RSA is active in the personal and commercial insurance markets. The former has struggled due to lessened activity owing to the pandemic, although the latter remains buoyant as SMBs (small-medium businesses) seek to shore up their delicate financial position.
“If the pandemic provokes recessionary conditions in economies around the world, commercial premiums can be expected to drop. [SMBs have] been a strong growth area for many insurers internationally, but many small businesses will be looking for ways to cut costs or some may not even exist if this pandemic is sustained for a long period.”
Aviva Investors launch $350m global climate credit fund
Aviva Investors has launched a climate transition global credit fund and has already allocated US$350m in strategic capital.
The funding, which has been provided by Aviva’s UK and Irish multi-asset funds, will be used to invest in companies offering goods and services that support climate change mitigation and the move towards a more sustainable future.
According to reports, the fund is in line with Aviva’s ESG philosophy on green policies and the United Nations sustainable development goals. It will be handled by portfolio managers Justine Vroman and Tom Chinery, as well as the noted climate specialist, Rick Stathers.
Aviva sustainable investment strategy
Companies excluded from the investment fund will be those entrenched in the fossil fuel industry, while enterprises that look at solutions to climate-related problems, such as sustainable transport, renewable energy and environmentally conscious lending, will be targeted.
Aviva Investors confirmed the goal is to capture transition-oriented companies with low decarbonisation and physical impact risk.
The initiative will also be benchmarked against the Bloomberg Barclays Global Aggregate Corporates Index, investing predominately in investment-grade companies and a small allocation of up to 5% in high-yield bonds.
Colin Purdie, Aviva Investors chief investment officer for credit, explained, "We can't pivot to a lower-carbon world if all we do is rule out the poor performers and only invest in companies that provide solutions to climate change. All companies need to adjust for a warmer, lower carbon world, which is why we felt it was important to use a wider transition lens to capture a larger set of businesses beyond those with obvious green credentials."
He said, "As investors, it is our responsibility to look beyond small pockets of green finance to engage and mobilise the liquidity of the wider credit market to assist in climate transition and the achievement of net zero carbon emissions."
Purdie added, "Companies that don't adjust their business models will be less attractive to investors and will present a less compelling investment case over time. Climate laggards may find that their financing becomes more expensive than that available to climate leaders."