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Berkshire Hathaway exits Munich Re, Swiss Re stakes on tougher reinsurance outlook; 3 ACA-created co-ops turn Q1 profits

Inthe news

BerkshireHathaway Inc. exitedits stakes in global reinsurers MunichRe and Swiss Re the face of a tougher outlook for the industry. Chairman, President and CEOWarren Buffett said at the worldwide debut of the company's annual meeting thatthe reinsurance industry has become less attractive as demand for reinsurance productswaned at the same time that the market saw a rush of new entrants, pressuringfinancial results of global reinsurers.

At the meeting, Buffett Berkshire Hathaway's culture andlong-term success and clarified that his decision to expand deputy Ajit Jain'sresponsibilities does not impact the company's . The CEO said themain long-term challengeat Berkshire Hathaway is how to manage its growing size, not whether it canperpetuate its all-important culture. He also talked about how the company'ssize has made it difficult to find low cost-of-capital worth in. Regarding the impact of aDonald Trump presidency,he said the company will continue to perform well and its business prospects "won'tbe the main problem" if the Republican frontrunner is elected.

The CEO, alongside Vice Chairman Charles Munger, alsocriticized everything from troubledbiotechnology companies to the hedge fund industry.

Berkshire Hathaway's first-quarter operating profitsslipped year overyear on lower earnings from its insurance and railroad businesses.

Affordable Care Act-created consumer operated andoriented health plans EvergreenHealth Cooperative Inc., NewMexico Health Connections and Minuteman Health Inc. will report as their exchange membershipbases continue to grow, S&P Global Market Intelligence reported.

U.S. House Financial Services Housing and InsuranceSubcommittee Chairman Blaine Luetkemeyer, R-Mo., legislation that would giveprimacy to state insurance regulators in adopting any international insurancesupervisory standards and allow congressional oversight of any internationalstandard-setting, including the ability to reject proposed standards.

AmericanInternational Group Inc. sold740 million of its shares in PICCProperty & Casualty Co. Ltd. at HK$13.08 per share for a totalof US$1.25 billion, Bloomberg News reported May 1, citing terms for the deal.

HanoverInsurance Group Inc., HanoverInsurance Co. and The Guarantors Agency are facing a copyrightinfringement lawsuit filed by Insurent Agency Corp. The complaint allegesthat the defendants used as their own duplicates of Insurent's copyrightedlegal documents titled Lease Rental Bond Policy and the Tenant ParticipationAgreement.

The Insurent Lease Guaranty Program is underwritten andissued by Argonaut Insurance Co.

A New York state judge orderedthe National Football League to allow insurers to talk to its officials anddoctors and access relevant documents related to a lawsuit over players'concussion claims, Bloomberg News reported. The insurers' request for evidencecould shed light on whether they are required to cover claims or not. Theleague previously argued that giving insurers such access could be damaging toits $765 million settlement with retired players.

In Oklahoma, the National Council on CompensationInsurance submitteda supplemental advisory loss cost filing to the state's insurance departmentindicating an overall increase in workers' compensation loss costs of 3.4%. Thehike was attributed to a state Supreme Court decision ruling that the permanent partialdisability deferral provisions in the state's workers' compensation laws areunconstitutional and breached injured workers' due process rights, NewsOKreported.

The Wisconsin Insurance Commissioner of the annualrequest by Ambac Assurance Corp.and Ambac Assurance Corp.Segregated Account to pay accrued unpaid interest on senior surplusnotes. Ambac Assurance is the principal operating subsidiary ofAmbac Financial Group Inc.

ThirdPoint Reinsurance Ltd. reportedpositive returns on its investment account in April, while reportednegative returns.

CNAFinancial Corp. reportedfirst-quarter net income of $66 million, or 24 cents per share, down from $233million, or 86 cents per share, in the year-ago quarter. Net operating incomewas $91 million, or 34 cents per share, compared to $225 million, or 83 centsper share, in the year-ago period.

OneBeaconInsurance Group Ltd. reportedcomprehensive income of $46.4 million for the first quarter, versus $24.3million for the first quarter of 2015. Operating income was $35.6 million or 38cents per share for the most recent quarter, compared to $15.0 million or 16cents per share for the year-ago quarter.

MercuryGeneral Corp., EnduranceSpecialty Holdings Ltd., HoraceMann Educators Corp., ArgoGroup International Holdings Ltd., ,National Interstate Corp.,National General Holdings Corp.and Universal Insurance HoldingsInc. are also expected to report earnings today.

Inother parts of the world

Swiss Re Ltd.CFO David Cole saidthat the company saw significant increases in gross written premiums in somelines of business in April.

Luxembourg-based Nuclear Industry Reinsurance Association iskeen on writing more business in the Middle East as many countries in theregion look to set up nuclear facilities, the Middle East Insurance Review reported,citing the association's managing director, Danny Van Welkenhuyzen.

Theday ahead

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

In Asia, the Nikkei 225 declined by 3.11% to16,147.38. In Europe, around midday, the Euronext 100 was higher by 0.41% to873.42.

Onthe macro front

The PMI manufacturing index, the ISM manufacturingindex and the construction spending report are due out today.