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The Morning Ledger: Lyft’s $864 Million Insurance Unit Shows Ride Hailing Is a Risky Business |
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Ride-hailing company Lyft has socked away nearly a billion dollars in an insurance subsidiary to offset the high cost of coverage from third-party insurers. PHOTO: RICHARD B. LEVINE/ZUMA PRESS
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Good morning. Finance chiefs are often tasked with charting a company’s path to market and navigating around operating risks. A three-paragraph section buried in Lyft Inc.’s nearly-800-page public offering document sums up the challenges of insuring unfamiliar risks born from newer business models, CFO Journal reports.
Getting it done. Lyft established an elaborate system through a subsidiary effectively allowing it to insure its own risk, thereby lowering its costs, according to the company’s stock-listing prospectus. Through the subsidiary, Lyft has set aside what it calls “restricted reinsurance trust investments” of $863.7 million.
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Big risks, bigger bills. Lyft assumes a wide range of risks—including bodily injury, property damage, uninsured and under-insured motorist liability—from the moment drivers become available on the Lyft app to the time passengers arrive at their destinations. The cost of insuring such risks could be a hefty burden for a company such as Lyft, which provided about 2 million rides a day during the fourth quarter.
Brave new world. Insurers typically rely on decades of industry performance records to measure the likelihood of certain outcomes and adequately price insurance policies. With too little data, some insurers won’t issue a policy. Others will increase the price to hedge against the lack of information.
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ANGI Homeservices Promotes Insider to CFO |
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Angie’s List parent ANGI Homeservices Inc. on Tuesday promoted Jamie Cohen to chief financial officer.
Ms. Cohen was most recently executive vice president of finance and accounting at the Golden, Colo.-based home-services company, a role she has held since its formation as a public company in January 2017. Before that, she held the same role at IAC/InterActive Corp.’s HomeAdvisor and played a key role in IAC’s acquisition of Angie’s List in 2017, which it combined with the HomeAdvisor homeowner-services brand to create ANGI Homeservices.
She succeeds Glenn H. Schiffman, who held dual roles as CFO of ANGI Homeservices and CFO of IAC. Mr. Schiffman will continue as CFO at IAC, a role he has held since April 2016.
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Mohawk Industries Names New CFO |
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Flooring company Mohawk Industries Inc. named former International Paper Inc. finance chief as its new chief financial officer, the maker of carpeting, tiles and wood flooring said Wednesday.
The Calhoun, Ga.-based company said Glenn Landau will become CFO and executive vice president, effective April 1. He succeeds Frank Boykin, who will retire as CFO on March 31, 2019, and will continue to assist with the transition through March 31, 2020, according to a filing with the U.S. Securities and Exchange Commission.
Mr. Landau was most recently CFO at International Paper Co., a role he held from February 2017 until he resigned for personal reasons in June 2018.
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The U.S. Commerce Department is scheduled to release its durable goods orders report at 8:30 a.m. ET. Economists surveyed by The Wall Street Journal predicted that orders for long-lasting goods fell 0.6% in January, compared with a 1.2% increase recorded in December.
British lawmakers rejected Prime Minister Theresa May’s Brexit divorce deal for a second time on Tuesday. What’s next for Brexit? A vote on Wednesday on whether Britain wants to leave the EU without a withdrawal agreement.
Vera Bradley Inc., Cloudera Inc. and Semtech Corp. are among the companies scheduled to report earnings today.
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From left: former Alstom CEO Patrick Kron, former GE chief Jeffrey Immelt and Steve Bolze, ex-head of GE’s power business, at an Alstom shop in Belfort, France in 2014. PHOTO: GETTY IMAGES
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General Electric Co. booked more in goodwill than it paid for Alstom SA's power business—a way of telling investors that the assets it bought had a net worth less than zero.
Verizon Communications Inc. will charge an additional $10 a month per smartphone for subscribers who want to add 5G speeds to their devices, the first major U.S. carrier to disclose pricing for the faster cellular service.
Rite Aid Corp. said its chief executive, finance chief and operating chief plan to leave the company as part of a wide-reaching restructuring plan that will also eliminate about 400 full-time jobs.
MoviePass owner Helios & Matheson Analytics Inc. said Tuesday that it overstated revenue and understated losses in the September-ended quarter as a result of accounting errors, the latest setback for a company struggling to remain solvent.
The issues facing Edward Lampert’s new Sears are piling up as the old Sears Holdings Corp. demands more cash it says it is owed from last month’s sale of the retailer’s assets at a bankruptcy auction.
Huawei Technologies Co. is embedding itself into undersea cable systems that ferry nearly all of the world’s internet data—a move that current and former security officials in the U.S. say could pose a cybersecurity threat.
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Wells Fargo’s Timothy Sloan testifying on Tuesday before the House Financial Services Committee in Washington, D.C. PHOTO: MICHAEL REYNOLDS/SHUTTERSTOCK
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Wells Fargo & Co. Chief Executive Timothy Sloan faced combative questions Tuesday from a bipartisan group of U.S. lawmakers, his latest test in the yearslong fallout from his bank’s sales-practices scandal.
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Flights of Boeing Co.’s troubled 737 MAX were suspended in several more countries, putting most of the global fleet out of action and raising further pressure on the U.S. plane maker.
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The U.S. Federal Reserve Board of Governors has barred former Goldman Sachs Group Inc. investment bankers Tim Leissner and Roger Ng from working in the banking industry because of their alleged involvement in illegally diverting funds from Malaysian state investment fund 1Malaysia Development Bhd.
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Lumber Liquidators Holdings Inc. agreed to pay $33 million in fines after U.S. federal regulators and prosecutors accused the company of misleading investors about selling laminate flooring that contained excessive amounts of formaldehyde.
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U.S. Trade Representative Robert Lighthizer says he spoke with Chinese officials Monday and plans to do so again Wednesday. PHOTO: JIM WATSON/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Negotiations to settle the trade battle between the U.S. and China are intensifying, U.S. Trade Representative Robert Lighthizer told a Senate panel Tuesday, with both sides holding frequent talks aiming to clear the last stumbling blocks.
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The European Union moved Tuesday to recalibrate ties with China, promising to address growing threats to trade, economic growth and security posed by Beijing’s global assertiveness.
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The U.K. government on Wednesday outlined its plans for a new tariff system following a potential no-deal Brexit, including a rise in costs for European cars and meat, the Financial Times reports.
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Lufthansa AG, a German airline, extended the contract with its current chief financial officer, Ulrik Svensson, for three more years until Dec. 31, 2022. He became Lufthansa's CFO in January 2017.
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