How about some weally good proofreading before you publish an article? Safeco is a very fine company, but obviously Liberty Mutual overpaid. I guess they didn’t do enough due diligence or they had competition to buy it and that drove up the offer. It will take a while of profitable operations to come out good, but it will happen as long as the economy bounces back (hopefully next year) after we throw some bums out of office.
IPO’s are typically used when the firm needs to raise capital to fund additional projects that the firm cannot obtain from internal sources or the debt markets.
With the current weak economy and a soft casualty/property market, it makes sense.
Has anyone that has opined here bothered to look at and read the initial registration (S 1) with the SEC filed in May? I certainly did.
The offering was valued at 1.4 to 1.5 times book after the original registration in May which is a very ambitious and rare premium for property casualty companies at this point in time. They’ll have a long wait before they ever see that multiple. Citi and BofA/Merrill simply couldn’t run the deal with the numbers based on the the business plan management submitted. The market is nowhere near $18 to $20 support price needed by Liberty management to complete the deal
The reason for this IPO was to wall off the Liberty broker markets yet still allow Liberty Mutual to retain operating control over the broker markets (most notably Safeco, Ohio Casualty, American States and Golden Eagle) to avoid a looming problem they were facing with their distribution sources on the brokerage side. The “old” Liberty would end up owning as much as 80% of the Liberty Mutual IPO.
Here is the link to the original S1/A for Liberty Mutual Agency:
Great comments CA Prod. I have friends that work(ed) at Liberty recently. They talked about a lot of apparent cash flow problems, including an almost complete inability to secure approval to pay fire claims from the So. CA fires several years ago. This was true even where documentation fully justified the payment and the adjuster and manager recommended and requested it. It was then that I first began to wonder about the possible negative impact of the OH Cas and Safeco acquisitions. One person’s opinion (mine) is that they grew to far too fast, and are now in a capital and/or cash pickle. It is hard to grow your way out of it considering how challenged the earnings and invesment markets have been (soft premiums and almost non-existent returns).
Did you really just write that they will struggle for awhile? Heck, I wish our Company would be struggling so badly. Indiana Insurance is about 40% less than every other carrier, and they have been for 6 years. Cheap, cheap, cheap, and with little to no underwriting. They’ve got something figure out with their multi-variate product. They’re stealing the market, and when this thing turns, they’ll be holding the pot of gold.
Back in the old days, Liberty Mutual was a direct writer with Sales Reps. In recent years, they got into agency markets and had a successful acquisition of America First. Management apparently thought they could swallow Safeco & Ohio Casualty, however, they may have stuck in the throat and IPO was the heimlich maneuver. This economy is not favorable and they will struggle for a while
I am not familiar with Indiana Insurance and how they write business. Liberty is like a giant Octopuss with many arms. In Texas, they use America First and it is an underwriting company who can be competitive if they want something, but not so much if it is not their cup of tea. I suppose they give latitude to their agency market companies to do their own thing, but will rein them in if the Loss Ratio gets bad since they do have to report to Boston.
Is weal property the same as weally good weal.
It’s close, but evidently isn’t worth as much though.
Guess they figured out what the rest of the world already knew…Safeco was a weal bad & weally costly decision.
How about some weally good proofreading before you publish an article? Safeco is a very fine company, but obviously Liberty Mutual overpaid. I guess they didn’t do enough due diligence or they had competition to buy it and that drove up the offer. It will take a while of profitable operations to come out good, but it will happen as long as the economy bounces back (hopefully next year) after we throw some bums out of office.
IPO’s are typically used when the firm needs to raise capital to fund additional projects that the firm cannot obtain from internal sources or the debt markets.
With the current weak economy and a soft casualty/property market, it makes sense.
Has anyone that has opined here bothered to look at and read the initial registration (S 1) with the SEC filed in May? I certainly did.
The offering was valued at 1.4 to 1.5 times book after the original registration in May which is a very ambitious and rare premium for property casualty companies at this point in time. They’ll have a long wait before they ever see that multiple. Citi and BofA/Merrill simply couldn’t run the deal with the numbers based on the the business plan management submitted. The market is nowhere near $18 to $20 support price needed by Liberty management to complete the deal
The reason for this IPO was to wall off the Liberty broker markets yet still allow Liberty Mutual to retain operating control over the broker markets (most notably Safeco, Ohio Casualty, American States and Golden Eagle) to avoid a looming problem they were facing with their distribution sources on the brokerage side. The “old” Liberty would end up owning as much as 80% of the Liberty Mutual IPO.
Here is the link to the original S1/A for Liberty Mutual Agency:
http://www.sec.gov/Archives/edgar/data/1491041/000095012310046821/b80759sv1.htm
Do your homework before you opine.
Great comments CA Prod. I have friends that work(ed) at Liberty recently. They talked about a lot of apparent cash flow problems, including an almost complete inability to secure approval to pay fire claims from the So. CA fires several years ago. This was true even where documentation fully justified the payment and the adjuster and manager recommended and requested it. It was then that I first began to wonder about the possible negative impact of the OH Cas and Safeco acquisitions. One person’s opinion (mine) is that they grew to far too fast, and are now in a capital and/or cash pickle. It is hard to grow your way out of it considering how challenged the earnings and invesment markets have been (soft premiums and almost non-existent returns).
Did you really just write that they will struggle for awhile? Heck, I wish our Company would be struggling so badly. Indiana Insurance is about 40% less than every other carrier, and they have been for 6 years. Cheap, cheap, cheap, and with little to no underwriting. They’ve got something figure out with their multi-variate product. They’re stealing the market, and when this thing turns, they’ll be holding the pot of gold.
Back in the old days, Liberty Mutual was a direct writer with Sales Reps. In recent years, they got into agency markets and had a successful acquisition of America First. Management apparently thought they could swallow Safeco & Ohio Casualty, however, they may have stuck in the throat and IPO was the heimlich maneuver. This economy is not favorable and they will struggle for a while
I am not familiar with Indiana Insurance and how they write business. Liberty is like a giant Octopuss with many arms. In Texas, they use America First and it is an underwriting company who can be competitive if they want something, but not so much if it is not their cup of tea. I suppose they give latitude to their agency market companies to do their own thing, but will rein them in if the Loss Ratio gets bad since they do have to report to Boston.