The French investment and insurance group AXA has announced that is has acquired 11.75 per cent of Continental’s shares. AXA has held shares in Continental before now but only recently publicised the fact in order fulfil German law. According German legislation, companies disposing of more than 10 per cent of their shares have to make this knowledge public.
German insurance group Allianz is reported to have reduced its stake in Continental A.G. from 7.7 per cent to 4.97 per cent. Continental said that prominent institutional investors now own 47.5 per cent of the company, with the remaining shares freely floated.
Titan International has reported its figures for the first quarter of the year. Sales were $129.0 million (1Q 2002: $123.7 m), but the company’s net loss grew to $5.9 million, compared to $2.9 million. This was blamed on increased raw material costs and increased employee benefit and insurance costs, which added over $4 million to expenditure in the quarter.NYSE Warns TitanTo add to the increase in losses, Titan has been notified by the New York Stock Exchange that its common stock has fallen below the NYSE’s listing criteria relating to minimum share price. This requires that the stock must trade at a minimum average price of $1 over a 30-day period. Titan has six months to return to compliance, but the company is confident that, should its shares cease to be traded on the NYSE, it will be able to find an alternative trading venue.
Fiat is to sell Toro – its insurance arm – to De Agostini for 2.4 billion Euros. Last year Toro turned over 5 billion Euros and achieved an operating margin of 3 per cent. Over the past 12 months, Fiat has disposed of assets worth 5 billion Euros.
Insurance premiums are becoming an increasing topic for concern for many businesses. T&A looks at the problem and tries to uncover the reasons why premiums are rising and some companies are having problems finding cover. Insurance is one of those business costs which we all hate but equally almost all agree are a necessity. No reasonable businessman would argue that he didn’t need insurance. Firstly there is Public Liability, which, contrary to common wisdom, is not a legal liability, nor is Product Liability for anyone making or repairing a product. Then there is Employer’s Liability Insurance, which is a legal requirement, and we haven’t even started on premises, stock, vehicles or more targeted niche policies. The big problem for everyone is that insurance premiums are climbing. There have been warnings of 100 per cent this year, and as much as 400 per cent increase over the next two years.A UK truck tyre retreader who called T&A in a complete state of shock was having to completely reconsider his business strategy and advised us of several competitors who were taking the only option open to them and shutting up shop. His premium for Premises and Business Income Insurance in December 2000 stood at £9,000, by the following year it had doubled to £18,000. This was bad enough, but December 2002 saw the premium rise to an incredible £60,000 with a £50,000 excess. At the same time his Employer’s Liability Insurance climbed from £9,000, through £20,000 to £42,000. He reckoned that his insurance premiums had risen by 700 per cent in two years. Worse still, this business had never made a single claim …
Insurance for all in the tyre industry is fast becoming a major problem. Legislation and an increasingly litigious society make it advisable to have the best cover you can, but it’s not always that easy. Premiums have shot through the roof as insurance companies are affected by the downturn in the stock market – it seems that the tyre industry is one sector whose business the insurance companies don’t want. Insurance was one of the topics debated at last year’s NTDA conference, but if retailers think it’s difficult to get cover, spare a thought for the poor retreader.
Kwik-Fit has been trialling a new, three-stage car care concept at a site in Edinburgh, offering motorists a service beyond that of a standard fast-fit operation. Fault diagnosis and mechanical rectification are available on the same site, as well as the usual fast-fit services. The concept is ready to roll out at selected locations in the UK and could transfer to mainland Europe. Five years qgo, Kwik-Fit launched its insurance scheme for motorists. Originally planned only as a telemarketing operation, the idea to offer insurance was an afterthought, which it was hoped would offset some of the costs. Read how the operation has grown to become the biggust outbound call centre in the insurance industry, plus a significant contributor to group profits.
Allstate and State Farm, two of America’s largest insurers are aiming to recover the costs of claims paid out to victims of traffic accidents involving Ford Explorers and Firestone tyres. An insurance industry spokesman said” Firestone and Ford have attempted to avoid the courts and settled claims quietly with the plaintiffs, I would expect the same strategy with the insurance companies.”
Ford has asked the Insurance Institute for Highway Safety to postpone crash testing of the 2002 Explorer to allow the manufacturer to make structural changes to the vehicle. Ford is making the changes after two of its trucks received “poor” or “marginal” ratings in crash testing.
The German insurance company “Allianz” wants to become involved in Formula 1. As the newspaper Die Welt announced recently, Aliens wants to sponsor the Williams-BMW team. Already with the coming German Grand Prix in two weeks at the Nürburgring, the company label will be on the racing car of the British team. It was mentioned that the insurance intends to invest 50 million DM (£16.3 million) in the team of Ralf Schuhmacher and Jensen Button.
In an interview with the German publication Frankfurter Allgemeine Zeitung, Conti boss Kessel said that Pirelli would be an ideal partner for the tyre business, as this would produce significant synergies. To date, there has been no contact with the Italians over this matter.n According to Kessel, Continental need not fear any possible hostile takeover attempt because the car manufacturers would be very interested in maintaining competent and independent suppliers. In addition, the company could rely on strong backing from its individual important shareholders, such as Deutsche Bank, Dresdner Bank and Allianz insurance company, which together hold 16%. Kessel did not mention the fact that, in light of the low stock price, analysts had changed their minds last week and that most, if not all, of them do not regard Continental shares as a “buy” any longer. Hard times for Continental!