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Health insurers look to grow Medicare Advantage biz; Cigna ups '17 outlook

In the news

As the insurance industry grapples with the uncertainty around the Affordable Care Act, major health insurers are aiming to expand their share of Medicare Advantage, a federal government program for the elderly, to boost profitability, reports Bloomberg News. Cigna Corp., Aetna Inc. and Anthem Inc. have announced their plans to grow their Medicare Advantage business either by building it or acquiring smaller players, the report noted.

Aetna CEO Mark Bertolini believes the ACA simply cannot be repealed and the Congress must try to negotiate a bipartisan fix for the health law instead of repealing it. In an interview on CNBC's "Closing Bell," Bertolini said Aetna will need the system to become more stabilized before it can return to those markets.

In earnings news, Cigna reported second-quarter adjusted income from operations of $750 million, or $2.91 per share, compared to $515 million, or $1.98 per share, in the year-ago period. The insurer also raised its outlook for 2017.

Aon Plc reported second-quarter net income attributable to shareholders of $769 million, or $2.93 per share, compared to $300 million, or $1.11 per share, in the year-ago quarter. Essent Group Ltd. reported second-quarter net income of $72.1 million, or 77 cents per share, compared to $52.3 million, or 57 cents per share, in the prior-year quarter.

WellCare Health Plans Inc. also reported quarterly results and increased its full-year 2017 adjusted EPS guidance.

Click here to read a summary of earnings reported Aug. 3 by select insurance companies covered by S&P Global Market Intelligence.

Over in Massachusetts, the Supreme Judicial Court ordered the rehabilitation and conservation of assets of Minuteman Health Inc. and named state Acting Commissioner of Insurance Gary Anderson receiver. The order came more than a month after the company announced that it intends to launch a new health insurer in response to the negative impact of the ACA-imposed risk adjustment program.

A projections report from Pension Benefit Guaranty Corp. warns that the insurance program for multi-employer pension plans is likely to face insolvency by the end of 2025. The program, which covers more than 10 million Americans, is projected to see an average deficit of almost $80 billion by 2026. Meanwhile, the financial condition of Pension Benefit Guaranty's insurance program for single-employer plans remains likely to improve over the next decade.

In deal news, Arthur J. Gallagher & Co. acquired GPL Assurance Inc. of Montreal. Terms were not disclosed.

Allscripts Healthcare Solution agreed to acquire McKesson Corp.'s hospital and health system information technology business, Enterprise Information Solutions, for $185 million in cash, subject to adjustment for net debt and working capital.

RenaissanceRe Holdings Ltd. filed a shelf registration for the sale of certain of its securities with a proposed maximum total offering price of $750 million.

In people moves, Atlantic American Corp. appointed J. Ross Franklin interim CFO, effective Aug. 1.

Featured news

Senate passes FDA, right-to-try bills; NICE backs Celgene's cancer drug: The Senate approved the U.S. Food and Drug Administration's user fee reauthorization bill and the "right-to-try" bill; and the U.K. National Institute for Health and Care Excellence recommended Celgene's pancreatic cancer drug Abraxane.

Financial news in other parts of the world

Asia-Pacific: NZ community trust buys Fisher Funds stake; Noah Holdings to expand overseas

Europe: RBS goes Dutch for EU base; Allianz Q2 up 83.4% YOY; Paysafe gets takeover offer

Middle East & Africa: Standard Bank eyes new biz; Angola's Recredit to buy $2B of bad loans

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng increased 0.12% to 27,562.68, while the Nikkei 225 declined 0.38% to 19,952.33.

In Europe, around midday, the FTSE 100 was up 0.09% to 7,481.22, and the Euronext 100 was up 0.01% to 1,001.41.

On the macro front

The employment situation report, the international trade report, the Baker-Hughes Rig Count report and the Treasury STRIPS report are due out today.