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Europeans Might Return To U.S. Life M&A Market

By Staff Writer

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NU Online News Service, March 9, 2004, 5:55 p.m. EST – The Europeans might come back to the market for U.S. life insurance companies.[@@]

Financial services analysts at A.G. Edwards & Sons Inc., St. Louis, make that prediction in a discussion of the recent conference of the Association of Insurance and Financial Analysts.

Although Europeans might re-join the U.S. life mergers and acquisitions game, the M&A field has changed so much that sellers are having a tough time getting good prices, the A.G. Edwards analysts write.

Other A.G. Edwards conference impressions:

- Variable annuity sales are recovering strongly, but, as usual, VA sales are taking longer to rebound than mutual fund sales are.

- Rod Martin, a life executive at American International Group Inc., New York, said undisciplined life underwriters are giving high-risk customers average-risk rates. Martin warned that life companies with weak underwriting standards could end up reporting lower profit margins, and that buyers may be leery of buying companies with serious underwriting problems.