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ACA plans getting more restrictive in '18; MAPFRE cutting US footprint

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ACA plans getting more restrictive in '18; MAPFRE cutting US footprint

A new study by Avalere Health indicates that Affordable Care Act health plans with more restrictive networks comprise 73% of the exchange market in 2018, up from 68% in 2017 and 54% in 2015. The health maintenance organization and exclusive provider organization plans, among others, are considered more restrictive, as they typically have comparatively fewer providers in their network and across specialties compared to preferred provider organization and point of service plans. Avalere analysis also found that deductibles for silver plans, the most popular type of plan on the exchange, will increase in 2018, to an average of $3,937, up from $3,703 in 2015, and will increase with each following year.

Elsewhere, Robert Laszewski, an industry consultant in Alexandria, Va., is of the opinion that a repeal of the ACA's individual mandate may drive many people to turn to cheaper, short-term health plans that may not cover pre-existing conditions or basic medical needs, The New York Times reported.

Spanish insurer MAPFRE SA is cutting its geographical footprint in the U.S. The company said it is exiting five U.S. states it currently has presence in, namely New York, New Jersey, Kentucky, Tennessee and Indiana in order to focus on 11 core states. MAPFRE said in an investor presentation that it has already engaged an investment bank to pursue the sale of its New York unit, MAPFRE Insurance Company of New York.

In more deal news, CF Corp. completed the acquisition of Fidelity & Guaranty Life for $31.10 per share in cash, or a total of about $1.84 billion, plus the assumption of $405 million of existing debt. In connection with the transaction, CF also bought certain reinsurance companies from HRG Group Inc., formerly Fidelity & Guaranty Life's largest shareholder.

And, Heritage Insurance Holdings Inc. completed its acquisition of NBIC Holdings Inc., the parent of Narragansett Bay Insurance Co., for $250 million.

Preliminary results indicate that the U.S. life and annuity industry's net income for the nine months ended Sept. 30 more than doubled year over year to $30.9 billion, according to a special report from A.M. Best. A $44.3 billion decrease in total expenses and federal and foreign taxes offset a 4% decrease in total income, according to the report.

Insured losses in Georgia resulting from Hurricane Irma have risen to $670 million, The Insurance Insider reported, citing the state's insurance department.

Anthem Inc. filed a shelf registration for the sale of certain securities from time to time.

Third Point Reinsurance Ltd. continued to report positive returns on its investment account in November, and Greenlight Capital Re Ltd. reported negative returns in the month. Third Point Re was up 0.1% and Greenlight Capital Re reported a loss of 2.0% in November.

Featured news

Shire's R&D head; Bayer's Monsanto bid; US FDA to fast-track cancer drugs: Andreas Busch will be Shire's new chief scientific officer; a U.S. regulator cleared Bayer's $66 billion Monsanto bid; and the U.S. Food and Drug Administration plans to improve the approval turnaround time for certain cancer drugs.

Financial news in other parts of the world

Asia-Pacific: US blocks China's 'market economy' status bid; ANZ's unit sale may fall through

Europe: Eurogroup race on; RBS closes bad bank; Munich Re eyes €2B of annual profit

Middle East & Africa: OPEC, Russia oil cuts extended; Orange to open bank in Africa

Latin America: Bci to buy TotalBank for roughly $528M; Finansur suspension extended

The day ahead

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

In Asia, the Hang Seng decreased 0.35% to 29,074.24, while the Nikkei 225 increased 0.41% to 22,819.03.

In Europe, around midday, the FTSE 100 was down 0.32% to 7,303.32, and the Euronext 100 was down 0.68% to 1,032.25.

On the macro front

The PMI manufacturing index, the ISM manufacturing index, the construction spending report and the Baker-Hughes Rig Count are due out today.