Company news in brief

26 July 2021 | Business

Global insurance recovery will be faster

The global insurance industry is poised to recover more quickly and forcefully from the pandemic than it did after the 2008 financial crisis, despite such obstacles as low interest rates and inflation risk, insurer Swiss Re AG's chief Americas economist said on Friday.

Unlike the prior crisis, the pandemic did not weaken insurers' overall capitalisation or financial strength, which allows companies to write new coverage and increase revenue, economist Thomas Holzheu told Reuters.

Writing new policies was more difficult in 2009 and 2010 when insurers were reeling from capital losses, slow economic growth and depleted incomes of companies and individuals.

In contrast, businesses and individuals now have more money from government stimulus and support programess, and are more conscious of the need to buy protection against risks, he added.

Swiss Re's view aligns with other bullish signs. Global commercial insurance prices, for example, rose 18% in the first quarter of 2021 from a year earlier, on average, insurance broker Marsh McLennan Cos Inc said in May. Rates have risen since late 2017. – Nampa/Reuters

Canadian strike at Rio Tinto

Canadian union Unifor said yesterday about 900 workers had started strike action at global miner Rio Tinto's operations in the western Canadian province of British Columbia.

Unifor issued a 72-hour strike notice on Wednesday after nearly seven weeks of unproductive talks over proposed changes to workers' retirement benefits and unresolved grievances.

"Rio Tinto was given every opportunity to reach a fair deal but showed complete disregard for our issues," the union said in a statement.

The union represents about 900 workers at the miner's aluminium smelting plant in Kitimat and power generating facility in Kemano.

Unifor said it was committed to resolving the labour dispute amicably and urged the mining company's management to reach a fair settlement. – Nampa/Reuters

Vitol hands record payout to traders

Vitol Group has paid a record US$2.9 billion to its executives and staff through share buybacks so far this year after the global energy trader posted its best-ever results in 2020, Bloomberg News reported on Friday.

Vitol's 2020 net profit of US$3.2 billion exceeded its previous record of US$2.3 billion, which it last achieved in 2019, the report said, citing the company's audited annual accounts.

Vitol made a significant chunk of its profits during the second quarter, when oil demand collapsed, allowing traders to buy cheap crude and store it, while locking in a profit by selling forward the oil on the futures market at higher prices, according to the report.

The trading house has distributed a total of nearly US$19 billion through share buybacks in the past 17 years to its partners, the report added. – Nampa/Reuters

Vodafone to launch share buy-back

UK's Vodafone Group said on Friday it intends to launch additional share buy-back programmes over the next eight months to partially offset the increase in the company's issued share capital due to maturing of a convertible bond programme.

The mobile and broadband operator, which has roped in Goldman Sachs as principal of the programme, said the buy-backs will start on July 26 and end by Nov. 17.

Earlier in the day, Vodafone reported a better-than-expected rise in first-quarter service revenue as more stores reopened and tourism made a tentative return following last year's Covid-19 disruption.

The British company had said in May free cash flow would increase to at least 5.2 billion euro (US$6.12 billion) this year, after it met its target of "at least" five billion euro in the year to end-March. – Nampa/Reuters

Volkswagen chips crunch easing in Q3

Volkswagen expects semiconductor supply bottlenecks in China to start easing over the coming weeks and to cover the needs of the carmaker's main brand by the end of the third quarter, it said on Friday.

"We see light at the end of the tunnel," Volkswagen China chief Stephan Woellenstein told journalists in a briefing.

Woellenstein said he was still confident the company will record a rise in sales volume in China, both for the VW brand and the group, this year as long as the chip shortage does not worsen.

But he cautioned that further adjustments to production of Volkswagen brands made in China could not be ruled out due to Covid-19 outbreaks in Malaysia that were affecting chipmakers. – Nampa/Reuters