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Cyber claims soar as GDPR nears; reinsurance renewals to slump

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Cyber claims soar as GDPR nears; reinsurance renewals to slump

AIG Europe research shows that a further surge in data breach and other security failure insurance claims is expected after Europe's General Data Protection Regulations goes into effect Friday. The law is likely to become a tool for negotiation by extortionists, who will threaten to compromise an organization's data unless a payment is received, knowing that the consequences will be more significant. GDPR is also expected to result in more shareholder lawsuits against companies and their directors.

In the report, AIG Europe also said it received as many cyber claims notifications in 2017 as in the previous four years combined,

The U.S. insurance industry is cheering the recently passed bill that rolls back some of the measures of the Dodd-Frank Act. The bill includes language originally authored by Sens. Dean Heller, R-Nev.; and Jon Tester, D-Mont., that would bring more transparency to international negotiations regarding insurance capital standards. The legislation cleared the House on Tuesday and awaits President Donald Trump's signature.

The nonpartisan Congressional Budget Office estimates that it will cost the U.S. government $685 billion in subsidies this year to help provide Americans under age 65 with health insurance through their jobs or in government-sponsored health programs. That amount is projected to reach $1.2 trillion in 2028.

KBW expects mid-year reinsurance rate renewals to lag the Jan. 1 increases, Artemis wrote. Loss-affected accounts are renewing at flat to up 5%, while renewal rates for loss-free accounts are mostly flat to down 5%. Retrocessional renewals are seeing hikes of 7% to 12% on a risk-adjusted basis, below January's 15% to 17% rate increases.

The U.S. life and annuity industry recorded full-year statutory pretax net operating gains of $62.0 billion in 2017, down 7.4% year over year, according to A.M. Best. Low interest rates and equity volatility remain the largest macroeconomic hurdles for the industry.

Meanwhile, first-quarter net premiums written in the U.S. property and casualty sector grew 15.2% year over year as the combined ratio improved to 94.8% from 99.7%, Business Insurance reported, citing an A.M. Best study.

State Farm Mutual Automobile Insurance Co. will lower personal auto insurance rates in Alabama by 3% in June, according to the Insurance Journal. The change will affect some 950,000 customers in the state, where State Farm is the largest auto insurer.

European insurers' factoring of environmental, social and governance considerations into underwriting and investment decisions is "not just PR" but "something they really are taking seriously," a Moody's analyst said.

China has jailed for 11 years Wang Yincheng, the former president of People's Insurance Co. (Group) of China Ltd., for receiving 8.7 million yuan in bribes from 2006 to 2016 to help individuals and companies with project contracts, giving employees promotions and hiring their children, Reuters reported.

Italian insurer Generali's Prague-based unit, Generali CEE Holding BV, will acquire Slovenia-based Adriatic Slovenica Zavarovalna druzba dd, as well as life and nonlife insurers in Poland.

Russia's VTB Group will officially announce the sale of its insurance business to JSC Sogaz tomorrow, Russian newspaper Vedomosti said, citing Andrey Kostin CEO of VTB Bank (PJSC). VTB, Russia's second-largest bank, will receive cash and shares in the merged insurance business, and will also participate in its operations. Sogaz is Russia's biggest insurer by premiums.

Featured news

Novartis' Remicade competitor approved; US CBO says ACA premiums to rise: Novartis' biosimilar competitor to Johnson & Johnson blockbuster Remicade was approved in Europe; and the U.S. Congressional Budget Office said premiums for benchmark insurance plans under the Affordable Care Act will rise 15% in 2019.

Financial news in other parts of the world

Asia-Pacific: US regulator fines ICBC; SeaBank M&A gets nod; CBA taps Citi for unit stake sale

Europe: Deutsche Bank to cut jobs in equities business; Turkish central bank hikes rate

Middle East & Africa: Deutsche Bank to cut South Africa ops; 2 Omani banks to weigh potential merger

The day ahead

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

In Asia, the Nikkei 225 dropped 1.11% to 22,437.01, while the Hang Seng was up 0.31% to 30,760.41.

In Europe, around midday, the FTSE 100 slid 0.01% to 7,787.43, and the Euronext 100 rose 0.44% to 1,080.45.

On the macro front

The jobless claims report, the FHFA House Price index, the existing home sales report, the EIA natural gas report, the Kansas City Fed Manufacturing index, the fed balance sheet and the money supply report are due out today.

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