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MetLife to spin off retail biz; insurers, reinsurers brace for Matthew losses


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MetLife to spin off retail biz; insurers, reinsurers brace for Matthew losses

Inthe news

MetLifeInc. will spinoff its retail business into the newly branded, publicly tradedBrighthouse Financial, which will encompass MetLife's U.S. life insurance andannuity books of business. MetLife is hoping that the separation would cut itscost of capital and exposure to market risk.

The insurance and reinsurance industry could seebillions of dollars of potentiallosses if Hurricane Matthew makes a U.S. landfall, Artemis reported, citingBen Brookes of RMS. He said RMS North Atlantic hurricane models show thatlosses could "rival some of the largest events in recent history" ifthe storm lands near Miami.

Hurricane Matthew is moving over the Bahamas and isforecast to approach the east coast of Florida, according to updates from theNational Hurricane Center. Florida Gov. Rick Scott has begun ordering voluntaryevacuations for certain counties on the eastern coast of the state, withmandatory evacuations for the barrier islands in Brevard County.

Insurers like Heritage Property & Casualty Insurance Co.,Universal Property & CasualtyInsurance Co., Florida Peninsula Holdings LLC and State Farm Mutual Automobile Insurance Co. are preparingto respondto claims, The Sun Sentinel reported.

Endurance Specialty Holdings Ltd. will pay a of $204.9million if Endurance's board changes its recommendation of the companies'merger or Endurance agrees to another acquisition offer. Among the ofSompo's agreement to acquire the Bermuda-based insurer and reinsurer will bethe strengthening of the Tokyo-based insurer's relatively deep roots in theU.S. market.

WellCareHealth Plans Inc. entered into an agreement with , anaffiliate of Blue Shield ofCalifornia, to acquire units Care1st Health Plan Arizona Inc. andONECare by Care1st Health Plan of Arizona Inc.

Former AmericanInternational Group Inc. Chairman M.R. "Hank" Greenbergsaid on the witnessstand during the trial of a lawsuit filed against him that he did not havetime to commit fraud, Bloomberg News reported. Greenberg denied having anydirect involvement on individual deals, saying that he was busy visitingcountries, reviewing documents and attending meetings. He also deniedallegations that the deal with Gen Re was set up to remove $100 million in lossexposure from AIG's books.

The U.S. Department of Labor is aiming for apossible federal rolein the state workers' compensation system, considering new minimum nationalstandards that would trigger federal involvement if states fall short of theprogram standards.

Private U.S. P&C insurers saw their firstyear-to-date net underwriting loss in more than three years with a $1.5billion net underwriting loss in the first half of 2016, according to ISO, aVerisk Analytics Net income after taxes fell to $21.7 billion in first half from $31.0billion in the year-ago period. Insurers' combined ratio deteriorated to 99.8%from 97.6% in the first half of 2015.

The reinsurance market saw about $122.4 million of newrisk capital in the third quarter from four catastrophe bond litestructured transactions, Artemis reported, citing PCS. Strong cat bond liteactivity in the third quarter helped year-to-date publicly revealed issuancehit $423 million from 11 transactions.

Special enrollment Affordable Care Act customers have higherhealthcare costs and lower risk costs than people who sign up during theopen enrollment season, according to an analysis from Avalere. Dan Mendelson,president of the health consultancy, said the trend is "one of manytechnical problems that is presently destabilizing this program."

UnitedHealth Group Inc. is facing a lawsuit filed bycustomers accusingthe insurer of charging co-payments for prescription drugs that were higherthan their actual costs, Reuters reported.

Financialnews in other parts of the world

Asia-Pacific: Chinese firms to acquire Singapore reinsurer; Switzerland asksMalaysia for legal help on 1MDB probe

Middle East & Africa:

Europe: IMF stresses NPL issue; SVG accepts Goldman, CPPIB offer; RBI, RZBto merge

Theday ahead

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

In Asia, the Hang Seng rose 0.69% to 23,952.50, andthe Nikkei 225 was up 0.47% to 16,899.10.

In Europe as of midday, the FTSE 100 was down 0.13% to7,023.83, and the Euronext 100 fell 0.35% to 884.03.

Onthe macro front

The jobless claims report, the EIA natural gas report,the Fed balance sheet and the money supply report are due out today.