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Michael cost near $8B; US insurer buys Munich Re Lloyd's biz; NatGen cat losses


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Michael cost near $8B; US insurer buys Munich Re Lloyd's biz; NatGen cat losses

Catastrophe risk modeling specialists Karen Clark & Co. estimated that insured losses from Hurricane Michael will be close to $8 billion, Artemis noted. The loss estimate is based on privately insured wind and storm surge damage to residential, commercial, and industrial properties as well as automobiles, but excluding National Flood Insurance Program impacts.

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The aftermath of Hurricane Michael in Mexico Beach, Fla.
Source: Associated Press

On the other note, Keefe Bruyette & Woods said that although the impacts of Hurricane Michael continue to develop, "it seems clear to us that its insured losses won't be overly disruptive.'' Insurance-linked securities funds fell less than the share prices of global insurance and reinsurance funds as Hurricane Michael struck Florida, Artemis noted. S&P Global Ratings said the storm is likely to be "an earnings event rather than a capital event for both the U.S. primary insurance and global reinsurance sectors."

The death toll from the storm had risen to six as of this morning, according to The Associated Press, which noted that Michael triggered flash flooding as far north as Virginia as it moved out toward the Atlantic Ocean. More than 900,000 homes and businesses lost power in Florida, Georgia, Alabama and the Carolinas.

Cincinnati Financial Corp. today announced that it is buying London-based MSP Underwriting Ltd. from Munich Re Co. for £102 million. MSP operates through Beaufort Underwriting Agency Ltd., which underwrites for Lloyd's of London Syndicate 318.

American Financial Group Inc. agreed to acquire Shaker Heights, Ohio-based ABA Insurance Services Inc. from American Bankers Mutual Insurance Ltd. for about $28 million in cash.

National General Holdings Corp. anticipates recording $35 million in catastrophe losses, net of quota share reinsurance recoverables, in the third quarter due to Hurricane Florence and the California wildfires in August.

Russian insurer SOGLASIE Insurance Co. Ltd. could face a nearly $70 million claim after yesterday's failure of a Soyuz rocket carrying two astronauts to the International Space Station, Russia's TASS news agency reported.

United Overseas Bank Ltd. is reviewing its life insurance tie-up with U.K.-based Prudential PLC as it aims to get more value out of its insurance operations, Bloomberg News reported, citing people familiar with the matter.

Meanwhile, Barry Stowe is retiring as chairman and CEO of Prudential's North American business unit, effective Dec. 31. His role includes serving as CEO of Jackson National Life Insurance Co.

Korean Reinsurance Co. obtained preliminary approval from the China Banking and Insurance Regulatory Commission to open a branch in Shanghai, The Korea Economic Daily reported.

Hong Kong-based Argyle Street Management Ltd. is pushing Dai-ichi Life Holdings Inc. to off-load its large stock portfolio and use the proceeds to buy back ¥1 trillion to ¥1.5 trillion of its own shares, The Wall Street Journal reported.

Ping An Insurance (Group) Co. of China Ltd. plans to boost long-term investments to hedge against lower global financial asset returns in the next five to 10 years, according to a senior company executive.

Life Insurance Corp. of India tapped ICICI Securities Ltd. to manage its open offer to acquire 2,041,512,929 equity shares in IDBI Bank Ltd., or a 26% stake, at 61.73 rupees each.

After closing its acquisition of the remaining 53.37% ownership of Morocco's Saham Finances SA, Sanlam Ltd. plans to sell a 5% stake in itself to black investors under South Africa's black economic empowerment program, CEO Ian Kirk told Bloomberg News.

Now featured on S&P Global Market Intelligence

Cyber insurance-linked securities have arrived, but market still in infancy: A few small cyber insurance-linked securities deals have already been done, but some remain unconvinced that the capital markets are yet ready to take on the growing, ever-changing risk.

After Chaucer deal, China Re faces hard road in building life insurance business: China Re is looking to move into life insurance in a bid to raise its ROE and in turn its market valuation, but one observer said such a deal could spur investors to compare it to peers with far stronger footholds in the segment, limiting any uplift.

Centene CEO says ACA expansion fills 'social need,' not selling short-term plans: Centene Chairman and CEO Michael Neidorff told S&P Global Market Intelligence that there is a "clear need" for it to enter new Affordable Care Act markets and that his company would "stay away" from short-term plans for now.

Bristol-Myers' Opdivo fails lung cancer trial; AbbVie, Novartis end Humira row: Opdivo failed to meet its main goal of overall survival, compared to chemotherapy, in a phase 3 study in lung cancer patients; and AbbVie agreed to grant Novaartis unit Sandoz a license to market a biosimilar of Humira beginning 2023.

In other parts of the world

Asia-Pacific: MUFG Bank seeks higher Vietinbank stake; Japanese firm eyes North America

Europe: Man Group plans new holding company; Banca Carige may seek business combinations

Middle East & Africa: Fitch downgrades Zambia; US regulator fines Mashreqbank over compliance issues

The day ahead

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

In Asia, the Hang Seng climbed 2.12% to 25,801.49, and the Nikkei 225 increased 0.46% to 22,694.66.

In Europe, around midday, the FTSE 100 was up 0.86% to 7,066.94, and the Euronext 100 was up 0.55% to 995.60.

Click here to read about today's financial markets, laying out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

On the macro front

The import and export prices report, the consumer sentiment report and the Baker-Hughes Rig Count report are due out today.

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