In the news
Republicans' plan of repealing and replacing the Affordable Care Act has raised concerns around the 20 million people who will lose coverage if the law is indeed repealed. In response to the issue, House Republicans said they are planning a replacement that would ensure "universal access" to healthcare and coverage. Rep. Kevin Brady, R-Texas, said the concerns over current coverage are merely "scare tactics." He reassured that health plans bought under the current healthcare law will not end Jan. 20, 2017.
The plan of quickly dismantling the healthcare law appears to be no longer an option, Reuters reported. Republican aides in the U.S. Congress said that a repeal could take months and creating a replacement of the healthcare law could take years. President-elect Donald Trump is expected to sign into law a bill that would repeal the current healthcare law in the first half of 2017.
HealthCare.gov extended the deadline for consumers to sign up for 2017 coverage until Dec. 19 due to "extraordinary demand," according to an alert posted on the website. The Washington Post reported that enrollment was supposed to end Dec. 15.
Hospital operators that were once eager to jump into the insurance business are pulling back amid headwinds that put a downward pressure on profitability, The Wall Street Journal reported. Nonprofit health system Catholic Health Initiatives appears to be no longer intent on growing the health insurance arm after it suffered losses. The nonprofit health system is reportedly putting some of its health insurance business on the block. Tenet Healthcare Corp. announced in November its exit from the health insurance business. The publication reported that hospital operators were hoping that the ACA would make the health insurance business a profitable one, but small enrollment led to losses and volatility.
Despite confronting an uncertain market, regulatory and rate outlook in the coming year, Prudential Financial Inc. remains confident in its ability to generate strong cash flow and return on equity as the insurer heads into 2017. Addressing investors and analysts at the company's 2017 financial outlook conference call, Prudential Chairman and CEO John Strangfeld noted that the company will enter the new year in good shape due mostly to a diverse business mix and strong capital position. Strangfeld's comments came in light of a continued sell-off in government bonds since the U.S. presidential election, which has sent yields soaring more than 75 basis points since Trump's victory.
MetLife Inc. anticipates that its financial performance will benefit from higher U.S. interest rates. The insurer projects that $300 million will be added to its operating profits through 2019. Higher U.S. interest rates are expected to boost the insurer's earnings by $45 million in 2017, $105 million in 2018 and $150 million in 2019.
Centene Corp. expects earnings per diluted share to be between $3.78 and $4.22 for 2017, while adjusted earnings per diluted share are projected to range from $4.40 to $4.85. Total revenue is expected to be between $46.0 billion and $46.8 billion.
The U.S. Circuit Court of Appeals for the Seventh Circuit allowed a federal racketeering lawsuit filed against State Farm Mutual Automobile Insurance Co. to proceed, Corporate Counsel reported. The lawsuit claims that State Farm gave campaign funds to help get Justice Lloyd Karmeier elected so that he could throw out a $1 billion state court verdict against the insurer.
In catastrophe-related news, Sevier County Mayor Larry Waters said the deadly wildfires that blazed through a Tennessee tourism community Nov. 28 resulted in more than $500 million in damage, the Insurance Journal reported.
Hailstorms that hit Texas in 2016 were some of the most damaging ones, creating billions of dollars in insured losses, the Insurance Journal reported. Hailstorms that raged in March and April caused more than $4 billion in damage to thousands of homes. The storms resulted in a record $2 billion in insured losses for automobiles. Texas Department of Insurance Senior Actuary Brian Ryder said the residential property market in the state will suffer an underwriting loss of 30% for full year 2016 as a result of the hailstorms.
Enstar Group Ltd. launched KaylaRe Ltd., a Bermuda-based class 4 reinsurer that offers specialty reinsurance on the global market. KaylaRe launches with initial capital of $620 million, backed by a $300 million investment from Enstar, $270 million from funds managed by Hillhouse Capital Management Ltd. and $50 million from funds managed by Stone Point Capital LLC.
MetLife maintained its lead as the top U.S. writer of ordinary and group life insurance premiums for the nine months ended Sept. 30, but the impending split of the company's domestic retail business could threaten its position.
A Delaware chancery court said Patriot National Inc. has to hold off on paying its special cash dividend of $2.50 per share of common stock slated for January 2017.
Maryland welcomed 15 new insurers in 2016, including six new insurers approved since July. The new insurers approved since July are ISDA Fraternal Association, Central States Health & Life Co. of Omaha's Censtat Casualty Co., Gvt Personnel Mutual Life Insurance Co.'s GPM Health & Life Insurance Co., Security First Insurance Co., Sompo Japan Fire & Marine Insurance Co. of America and United Heritage Life Insurance Co. The Maryland Insurance Administration also allowed four companies who are already licensed to do business in the state to offer additional insurance products.
Merck wins $2.5B in patent trial vs. Gilead; Sanofi advances in Actelion talks: Meanwhile, the attorneys general of 20 U.S. states filed a federal lawsuit alleging that generic drugmakers conspired to manipulate prices and reduce competition for an antibiotic and an oral diabetes medication.
Financial news in other parts of the world
Asia-Pacific: Indonesia keeps key rates; Taiwan's First Commercial to open Manila branch
Middle East & Africa: Central banks respond to Fed hike; Gabon restructures 3 banks
Europe: Intesa fined; Monte dei Paschi details share issue; Achmea eyes job cuts
Latin America: Mexico hikes benchmark rate; Cielo warns of possible hit to profitability
The day ahead
Early morning futures indicators pointed to a higher opening for the U.S. market.
In Asia, the Hang Seng slipped 0.18% to 22,020.75, while the Nikkei 225 increased 0.66% to 19,401.15.
In Europe, around midday, the FTSE 100 was up 0.31% to 7,020.64, and the Euronext 100 was up 0.57% to 927.51.
On the macro front
The market focus report, the housing starts report and the Atlanta Fed Business Inflation Expectations report are due out today.