Sept 16, 2020: Disney, Google and Lloyd’s of London

1. #entertainment  Coronavirus slammed Disney’s core business (MarketWatch)

What’s up?

Disney, the Magic Kingdom’s once sorcerous profitability, endured a greater existential financial crisis in the age of COVID-19.

Zooming out

The Mouse House faces adversity in its three core business units: 

• The theme park business experienced the most appreciable financial impact when the signature amusement parks in California and Florida were shut down.
• All live-action film production stopped in the company’s movie division. The release of the big-budget remake: “Mulan” was delayed indefinitely as most theaters remained dark across the country.
• The media network, which generated $24.8 billions dollars in revenue last year is equally vexing. The status of Major League Baseball’s truncated 60-game season teeters on collapse with the outbreak of COVID-19 among players and staff of the Miami Marlins.

Besides, it is unfortunate that, even when the pandemic is over, the damage of the super-expensive acquisition of 21st Century Fox is likely to saddle Disney with far lower returns.

2. #tech Google: The next big FinTech vendor (Forbes)

What’s up?

US banks is likely to partner with Google to monetize their customer relationships for two reasons:

• Customer prowess: Currently all banks do not have their own in-house infrastructure but rely on vendors like FIS and Fiserv. However, customers do not see these two from Adam. Therefore, Google’s name recognition is seen as a way to drive utilization of checking account and debit cards.
• Technology and Analytics expertise: While there are so many talks on chatbot and machine learning, only a few banks actually deployed them. Then who would be better to turn to than the leader in the space?

3. #insurance The most annoying sound in the world from Lloyd’s of London (Finimize)

What’s up

Lloyd’s of London made a loss of $530M loss before tax in the first 6 months, and it is expected to fork out another $3 billions throughout the rest of 2020. The combined ratio of the company is 110% compared to 98.8% the same time last year.

Why should I care?

• The insurance industry is not doing good. Lloyd’s of London is seen as the barometer of the industry because of its broad span. The company provides insurance for people and businesses, including other insurance companies via “reinsurance”.
• It is getting worse and worse. UK financial authorities are currently contesting insurers’ avowed lack of liability for certain pandemic-related claims which typically apply only in cases of physical damage. The outcome could lead to higher costs for insurers everywhere.