Insurance
Insurance seems an unnecessary burden
To some people, insurance might seem like an unnecessary burden that spoils the enjoyment of buying an exciting new item. However, this unnecessary burden becomes a vital and valued agreement if this new purchase gets damaged or finds itself the victim of theft. No-one wants their possessions to need replacing or repairing, and seeing as insurance is related to this they might not feel they need to take it out. However, those without insurance may have to pay a lot more eventually.
The cost could be huge, for example, if a pet owner does not have an adequate pet insurance policy covering their pet. Recent reports have highlighted the heartbreaking reality of pets being put to sleep because owners have not been able to meet the costs of veterinary treatment. In such situations, the pet owners must have wished that they had insurance in those situations.
There are other areas too, such as home insurance, which will provide cover to either contents or the building itself (meaning that potential buyers should always read the small print). If a home owner is unfortunate enough to suffer a break in, then at least those with insurance will take some comfort in knowing that they are covered.
Prudential scraps deal to buy AIA
Prudential, the UK insurer has cancelled the deal to buy AIA, AIG’s Asian life unit in the face of harsh criticism from the shareholders over the price the company had conceded to pay. The company has reportedly failed to negotiate a lower price leading to the stiff opposition from the shareholders.
In March, Prudential had agreed to the deal of buying AIA for $35.5billion (£24.6billion), but had asked the company to cut down the price to $30 billion, following an outcry from the shareholders. But the US giant American International Group had refused the offer thereby, leading to the failure of a last-minute plan of Prudential by means of which it will simultaneously sign the deal and placate the shareholders as well.
Prudential Chairman Harvey McGrath has declared in an official statement that owing to the failure of reaching an agreement with the shareholders one the price offered and AIG to reduce the price, Prudential has withdrawn from the transaction.
The company’s shares were 3.3% lower in early morning London trading. Later it had closed 2.5% lower at 561 pence. But on Tuesday, final reports that the deal was being scrapped had triggered off a share price rise among shareholders who had apparently heaved a sigh of relief.
However, the failure of the takeover effort has raised questions and speculations about its strategy. Both Chief Executive Tidjane Thiam and McGrath who had almost personally spearheaded the plan that would have made Prudential Asia’s largest foreign-owned insurer will spend much of their Wednesday in a meeting with the insurer’s top investor, in an attempt to placate them and subdue a talk of breaking up the top insurer of Britain-an issue which has again raised its head.
The management has found itself in a difficult situation indeed and has to provide a lot of explanations about the hefty charges incurred as the cost of the failed deal as well.
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