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Calif. blocks Applied Underwriters deal; Dallas tornadoes; Centene earnings


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Calif. blocks Applied Underwriters deal; Dallas tornadoes; Centene earnings

The California Department of Insurance denied Applied Underwriters Inc.'s application for a change in control of subsidiary California Insurance Co. The insurance department said it rejected the request after Applied Underwriters allegedly tried to merge California Insurance into a newly formed New Mexico-domiciled entity without prior regulatory approval.

The National Weather Service said two confirmed tornadoes occurred Oct. 20 in Dallas County. The highest-rated tornado, an EF-3, caused significant damage in North Dallas with estimated peak wind speeds of 140 mph. A second tornado caused damage to trees, businesses and homes in the Rowlett area consistent with an EF-1 rating. The peak winds with the second tornado were estimated at 100 mph.

Travelers Cos. Inc. reported third-quarter net income of $396 million, or $1.50 per share, compared to $709 million, or $2.62 per share, in the year-ago period. Core income declined to $378 million, or $1.43 per share, from $687 million, or $2.54 per share, primarily because of net unfavorable prior-year reserve development in the current quarter, "including the impact of an increasingly challenging tort environment."

Centene Corp. reported third-quarter net earnings attributable to the company of $95 million, or 23 cents per share, up from $19 million, or 5 cents per share, in the prior-year period. The company also cut its GAAP EPS projection for 2019 to between $3.04 and $3.21 from $3.70 to $3.87 previously.

MGIC Investment Corp.'s third-quarter net income slid to $176.9 million from $181.9 million a year ago.

Fairfax Financial Holdings Ltd. Chairman Prem Watsa said the company will "never be taken over," The Insurance Insider reported. He also disclosed that he intends to transfer the 6.7% of the business he beneficially owns to a charitable trust at some point.

British insurer Watchstone settled a £637 million legal claim filed by Australian law firm Slater & Gordon over the sale of the group's professional services unit, The Telegraph wrote. The £11 million settlement is reportedly lower than expected and will be paid from £50 million Watchstone has already provisioned.

A number of insurance segments in Germany are on course to see "positive" premium development and conditions in 2020, according to Hannover Re subsidiary E+S Rückversicherung AG. Stable average premiums and conditions are mostly expected in the motor insurance segment, although pricier spare parts and repairs could lead to a "modest strain on profitability."

JoAnn Martin is retiring as CEO of Ameritas Mutual Holding Co. and Ameritas Holding Co. and as chair of Ameritas Life Insurance Corp., effective Jan. 10, 2020. The companies' boards named William Lester to succeed Martin.

The pretax and net operating profits of U.S. title insurance companies saw "considerable growth" in 2018 despite premium growth slowing in the last two years, A.M. Best said in a new report. The rating agency has a stable outlook on the segment, citing strong operating results, housing appreciation and mortgage rates being below historical averages, among others.

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Record multiples for insurance brokers unlikely to decline soon: According to MarshBerry, there have been 451 insurance brokerage transactions through the third quarter. The flurry of activity comes as deal multiples continue to soar.

Renew terror insurance backstop quickly to avoid uncertainty, US lawmakers told: Lawmakers and industry representatives are pushing for a "clean" reauthorization before year-end to avert confusion over the status of coverage for large-scale terror events.

Analysts focused on commercial P&C pricing after average cat losses in Q3: Among the largest public U.S. P&C companies, sell-side analysts expect nine to report year-over-year earnings gains, while eight are projected to record declines.

In other parts of the world

Asia-Pacific: Temasek offering to raise Keppel stake to 51%; Japan to stress test banks

Europe: UBS Q3 profit falls 16%; Santander unit sells for $1B; BNP buys Allfunds stake

Middle East & Africa: KFH Q3 profit rises YOY; Visa to open new HQ in Dubai; Ghana aims to go cashless

The day ahead

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

In Asia, the Hang Seng gained 0.23% to 26,786.20.

In Europe, around midday, the FTSE 100 lifted 0.37% to 7,189.91, and the Euronext 100 fell 0.11% to 1,091.46.

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

On the macro front

The Redbook Index for retail sales, the existing homes sales report and the Richmond Fed manufacturing index are due out today.

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