Wednesday's Headlines: Reinsurance Could Be The Next M&A Hot Spot
The reinsurance market could be a hot M&A ground if corporate predators "have the nerve to look beyond a round of bumper claims triggered by the Japanese earthquake," says Reuters.
Sector activity has been put on hold while buyers try to assess how much the quake will cost reinsurers, which experts estimate could reach $25 billion. But historically, natural disasters have pushed up reinsurance prices as claims eat into the industry's capital, forcing smaller players out and pushing prices higher. "The market was turning anyway, and the earthquake will shift it, which will obviously be a good entry point for private equity and for M&A activity on a wider basis," said Barrie Cornes, insurance analyst at Panmure Gordon.
FINRA fined Southwest Securities over municipal-bond adviser payments. [Investment News]
JPMorgan Chase, Citigroup, Bank of America and Goldman Sachs hold nearly 95 percent of the industry's derivatives contracts. [DealBook]
BofA hired JPMorgan Chase's Adam Bernard as a director in its high-yield debt unit. [BusinessWeek]