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Some investors still oppose AmTrust deal; lukewarm interest in Aspen auction

In an emailed statement to S&P Global Market Intelligence yesterday, Czech investment company Arca Capital dismissed as "cosmetic" the $1.25 per share increase in AmTrust Financial Services Inc.'s go-private deal value. It remains "strongly against" the revised transaction. Fellow shareholder Short Hills Capital Partners is against the sweetened deal as well, The Insurance Insider reported.

In other M&A news, Apollo Global Management LLC and Blackstone Group LP are expected to be the likeliest acquirers of Aspen Insurance Holdings Ltd. in what is turning out to be an auction generating lukewarm interest, according to another Insider report. Argo Group International Holdings Ltd. had made a cash-and-paper bid but there was a valuation mismatch that is unlikely to be bridged in its favor. The deadline to submit final bids in June 29.

In the U.K., Lloyds Banking Group PLC raised £344 million from the sale its remaining 97.7 million shares in Standard Life Aberdeen PLC, representing 3.3% of the total shares of the U.K. asset manager, at 352.5 pence per share. The transaction settlement is expected to take place June 12.

Turning to catastrophe losses, Aon estimates that public and private insurers are on the hook for more than two-thirds of the estimated $2.3 billion in total combined economic losses from four separate severe weather outbreaks that hit the U.S. in May.

And, the Insurance Council of Texas said that damage to homes and autos in the aftermath of a hailstorm in Dallas is expected to cost the insurance and reinsurance business about $425 million, Artemis reported.

Meanwhile, the U.S. Department of Justice said the Affordable Care Act's individual mandate is unconstitutional under a tax law that President Donald Trump signed in 2017, Reuters reported. The tax law removed the penalty for not having health insurance and nullifies two major ACA provisions linked to the individual mandate.

Also, worldwide cyber insurance premiums will touch about $4 billion by 2021, which would amount to a 14.1% compound annual growth rate., according to Aon. Global commercial property and casualty premiums would increase at an annual rate of 5.3% to almost $900 billion by 2021, compared to about $730 billion in 2017. U.S. commercial P&C insurance premiums are expected to climb to $331.5 billion in 2021 from $274.5 billion in 2017.

Reinsurance: United Services Automobile Association has extended the maturity dates for $170 million in catastrophe bond notes by three months to Sept. 6, Artemis reported.

Deutsche Bank analysts expect renewals in 2018 to remain at the current 1% to 2% level and said that pricing could actually decline in 2019 if catastrophes in 2018 remain within expectations, according to Reinsurance News.

The joint healthcare venture between JPMorgan Chase & Co., Berkshire Hathaway Inc. and Amazon.com Inc. finally has a CEO, which they expect to announce within two weeks. David Feinberg, CEO of Geisinger Health System, shut down rumors that he was chosen for the job, telling CNBC that he plans to stay in his current job.

From the S&P Global Ratings insurance conference: Everest Re Group Ltd. is looking to deploy more capital in mortgage reinsurance as the regulatory landscape evolves and Chubb Ltd. CEO Evan Greenberg said private insurers should carry more of the burden of writing flood insurance than the federal government. Greenberg also urged companies to halt their purchases of U.S. municipal bonds until lawmakers and regulators do something to prevent law firms from filing an excessive number of securities-related lawsuits.

Arch Capital Group Ltd. is working with the Central Bank of Ireland to gain regulatory approval to continue certain underwriting operations of its U.K. insurer Arch Insurance Co. (Europe) Ltd. and its Gibraltar insurer Alwyn Insurance Co. Ltd. after the U.K. leaves the European Union.

And, a number of property and casualty companies saw their stocks slip during morning trading June 6 after a report surfaced that Amazon.com Inc. was considering entering the home insurance space.

Featured news

Bayer completes $62.5B Monsanto deal; DOJ says key ACA part unconstitutional: Bayer completed its acquisition of Monsanto after receiving all necessary approvals; and the U.S. Department of Justice said the Affordable Care Act's individual mandate is unconstitutional under a tax law that President Trump signed in 2017.

Financial news in other parts of the world

Asia-Pacific: Australia's Prospa delays IPO indefinitely; UK firm to invest in Indian PE fund

Europe: Lloyds exits Standard Life Aberdeen; Deutsche Bank to sell $3B energy loans

Middle East & Africa: Atlas Mara Q1 profit rises YOY; Moody's lowers Cameroon outlook

The day ahead

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

In Asia, the Hang Seng declined 1.76% to 30,958.21, and the Nikkei 225 decreased 0.56% to 22,694.50.

In Europe, around midday, the FTSE 100 was down 0.66% to 7,653.51, and the Euronext 100 was down 0.40% to 1,053.12.

On the macro front

The wholesale trade report and the Baker-Hughes Rig Count report are due out today.

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