Ethias & Snapchat
This week has been full of international informations about American Elections, Syria War ceasefire attempt failed, Haïti hurricane Matthew and in Belgium, the so publicized Westphael trial that came to an end. We decided to stay focused on business informations, and our selection goes on Ethias rehabilitation plan at the national level, and Snapchat future entrance into public trade market at the international level. Enjoy the reading.
Belgian Review—New Rehabilitation Plan for Ethias
Ethias has brought last Friday a new financial rehabilitation plan to the National Bank of Belgium after this one has estimated that the previous plan wasn’t good enough to ensure the sustainability of the insurer. The main measure of this new plan is to transfer to a reinsurer the total risk linked to “First A” contracts. These contracts are insurance contracts that guarantee high rates for life, and therefore costs a lot to the insurer. Ethias is currently negotiating with several reinsurers. The question is: how much it will cost to unload 1.4 billion euros coming with an average 3.4% lifelong rate. The operation will have a huge but unique cost, as said last week the CEO Benoit Verwilghen. There will be immediate positive impacts, such as the raise of solvability and the decrease of market sensibility. The NBB is doubtful about Ethias’s plan to keep the “stand alone” status.
On another hand, the socialist Walloon minister of economy Jean-Claude Marcourt is firmly defending the “stand alone” status of Ethias, arguing that Ethias is the biggest employer in financial services in Wallonia, and that a merger with another insurer would be a “social heresy” that will provoque a loss of employment in the region. He adds that the Walloon Region is ready to help if needed. There are already few insurers interested in the acquiring of Ethias, especially Ageas and Belfius on the Belgian side, and Allianz, Baloise, and a Chinese group, on an international side. In the meantime, a new CIO has been nominated at the head of Ethias, Brigitte Buyle, in charge of supporting the digital transition of the insurer. The trade-union SETca negatively sees this as a premise to a possible buying of Ethias by Belfius.
International Review—Snapchat may soon go on the public trade market
Snapchat is preparing its entrance on the public market, as its IPO may come in action in March 2017. It will happen on the basis of a market capitalization of 25 billion dollars. It will be the biggest IPO of an American company since Facebook in May 2012. Launched in 2011, Snapchat, today renamed Snap Inc, was first known for its messages that auto-destruct in few seconds. Today, it includes a lot more features, such as Discover and Stories, and it became a social network of 150 million daily users in the world. Snap has started its process of monetization. 300 million dollars of turnover is planned for this year, that’s 5 times more than in 2014.
According to eMarketer, Snap must reach the bar of the billion next year. Snap plans to diversify its products into electronics, and more specifically to produce sunglasses equipped by a little camera, in order to make little videos. “We are a camera company” assumes Snap. These last years, the number of start-ups entering the public trade has decreased, due to a general worry about the valuation of unquoted start-ups. Some of them, like the company Square, has come into the market with the consequence of a huge decrease of value. Nevertheless, we expect many other start-ups to break through the public market in the upcoming years, especially Uber, Airbnb, Dropbox or Pinterest.
Sources:
http://www.lecho.be/entreprises/banques/Pendant_qu_Ethias_defend_le_stand_alone_d_autres_se_preparent_a_un_plan_B.9816828-3027.art?ckc=1&ts=1476038217
http://www.7sur7.be/7s7/fr/1536/Economie/article/detail/2897456/2016/10/04/Marcourt-defend-l-independance-d-Ethias.dhtml
http://datanews.levif.be/ict/actualite/brigitte-buyle-est-la-nouvelle-cio-d-ethias/article-normal-559405.html
http://www.lecho.be/entreprises/tic/Snapchat_prepare_son_entree_en_Bourse.9818042-3060.art
http://www.lecho.be/les_marches/actu_general/Snapchat_fait_les_yeux_doux_a_Wall_Street.9817516-3502.art