Bloomberg News

Ace’s Greenberg Sees ‘Greater Pipeline’ for Potential Deals

October 26, 2011

(Updates shares in the last paragraph.)

Oct. 26 (Bloomberg) -- Ace Ltd., the insurer that expanded by purchasing businesses in Asia and the U.S., is prepared to make more deals as market turmoil makes potential targets available, Chief Executive Officer Evan Greenberg said.

“As a result of these stressed times, we are seeing a greater pipeline of opportunity than in the recent past, and we’re open to additional acquisitions,” Greenberg said in a conference call today. “We’re seeing a little more around opportunities with financial institutions that own insurance companies where insurance is a secondary business to them.”

Greenberg has been diversifying by expanding through acquisitions in countries including Malaysia and South Korea and bolstering business lines such as U.S. crop insurance. The deals give Zurich-based Ace flexibility to focus on markets where pricing is more favorable and limit the risk from a natural disaster in one region, said Tom Mitchell, an analyst at Miller Tabak & Co. who rates Ace a “buy.”

“Ace’s maneuvers to get itself into a different mix of business have been very astute,” Mitchell said in an interview before the company posted third-quarter results yesterday.

Operating profit climbed to $2.22 a share from $2.01, beating by 44 cents the average estimate of 20 analysts surveyed by Bloomberg. The insurer raised its forecast for annual profit to $6.55 to $6.75 a share from $6 to $6.20. Ace is benefiting from better-than-expected results at Rain and Hail Insurance Service Inc., the U.S. crop insurer it acquired last year.

‘Stay Tuned’

Ace also struck deals last year to buy Malaysia-based Jerneh Insurance Bhd. and New York Life Insurance Co.’s Hong Kong and South Korean life units.

“Stay tuned,” Greenberg said today when asked about what regions he may be focusing on for additional expansion.

Ace rose $2, or 2.9 percent, to $71 at 4:15 p.m. in New York Stock Exchange composite trading. The company has advanced 14 percent this year, compared with the 6.4 percent decline in the 78-company Bloomberg World Insurance Index.

--Editors: Dan Kraut, William Ahearn

To contact the reporter on this story: Maryellen Tighe in New York at Mtighe6@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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