Here is a list of insurance companies expected to benefit from the upcoming financial deregulation bills in Congress.
These companies are included in an article in the November 1, 1999 issue of Barrons.
interactive.wsj.com@1.cgi?coupe61/text/barrons/data/SB941236876462078280.djm/&NVP=&template=barrons-news-search.tmpl&form=barrons-news-search.html&dbname=barrons/index&words=allstate+insurance&any-all=AND&maxitems=30&HI=
Last week, you may recall, we offered up a few potential beneficiaries of the end of financial regulation as we've known it. More specifically, we relayed a clutch of banks, chosen by David MacAllaster, fine fellow and crack bank analyst, that might be positively affected by the new freedom.
Just to show we're a nondiscriminating scribe, we thought it'd be nice to offer equal space for insurance companies likely to get a boost from financial reform. So we turned to another fine fellow and crack analyst, Charles Peabody of Mitchell Securities. Charlie, even though his primary specialty is banks, is bearish on most of the group, especially the big fellows, because he thinks, on several counts, their profits are slated to decline.
Instead, he feels, the best way to play financial services deregulation is to buy select property and casualty stocks. His reasons are (1) they're cheap; (2) the industry's horrid pricing cycle is due to change for the better in the next 12 months; and (3) there will be a rash of takeovers, both among the carriers and by big banks.
Powerful attractions for corporate buyers, he contends, are their shriveled market caps and their "excess capital," which could be used to much productive use by an acquiring bank.
Among his favorites: Allstate, now selling around 27, which, in a deal, could be worth twice that figure. Chubb, which recently has had a neat run to 55 but, again in a deal, might be worth 95. Horace Mann, 28 and change, with a takeover price tag of around 40. Chicago Title and, not least, Safeco, both of which, in any union, would also surely fetch a very handsome premium over their present prices. |
