Weekly briefs

GPG to quit Tyndall?, TEA to supervise, Reinsurance grows, Bug may delay merger.

Sunday, January 31st 1999, 12:00AM

Speculation is mounting in Australia that Guinness Peat Group (GPG) will quit its 51 per cent in Tyndall Australia, and that Royal & SunAlliance will buy the business.
Such a sale would have significant ramifications on both sides of the Tasman. In Australia it would push Royal up the rankings in terms of size, and in New Zealand Royal would acquire Tyndall subsidiary Guardian Trust.
An indictor towards whether or not a sale is on the agenda may come from a hearing in the Court of Appeal in Wellington on February 3 relating to GPG's attempts to merge with Tower Corporation.

GPG is challenging Tower's proposed demutualisation plans.
GPG would end up with more than $500 million in the bank if a sale proceeds.
Shares in GPG and Tyndall soared last week on this sale speculation. Tyndall rose 11 per cent to A$2.71 in Australia, while in New Zealand GPG jumped 8.7 per cent to $1.86.
Meanwhile, GPG target Tower Corporation says it is likely to form a partnership with a major bank if it succeeds with its demutualisation plans.
Such an alliance would allow it to compete more effectively in a market where, because of mergers and acquisitions, financial services are becoming dominated by a smaller number of huge institutions offering the full range of financial products.
Tower's strategy has been to focus on the savings and risk management sectors of the market, building its operations mainly in the areas of insurance, funds management, and trustee services.

TEA to supervise
Royal & SunAlliance have appointed Trustees Executors as prudential supervisor of the workers' compensation insurance products it will provide in an alliance with Southern Cross.
The market for workers compensation insurance will start on July 1.
Royal & SunAlliance manager, workers compensation Nigel Edmiston says the prudential supervisor plays an important role in protecting the interests of employers, employees and insurers in the new $1 billion workers' compensation market.
The supervisor monitors the solvency of the insurer to ensure compliance with various aspects of the relevant legislation.

Reinsurance grows
The global reinsurance market in 1997 was worth US$124 billion (NZ$231.5 bill) of which 83 per cent represented non-life business and the remainder life and health insurance, according to Swiss Re.
In a consolidating industry, around 75 per cent of ceded business is generated in the mature insurance markets of North America and Western Europe will only four per cent come from Japan.
Between 1990 and 1997, non-life reinsurance business rose from US$69 billion to nearly US$103 billion.
Expansion has been fuelled mainly by above-average demand from North American insurers in response to replacement of pools of reinsurance treaties.

Bug may delay merger
The millennium bug (Y2K) could hold up the Deutsche Bank, Bankers Trust merger for six months, according to a report in the Financial Times.
If a June 30 deadline for completing the merger is not met, the process may have to wait until early in 2000.
An executive responsible for the corporate and investment banking side of the merger said if the takeover was not completed by June 30, Deutsche thought the US Federal Reserve may ask the banks to hold off integrating their IT systems until next year.

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