AmericanInternational Group Inc. hosted more than 20 sell-side analysts at its New Yorkheadquarters, as it tries to restore confidence in its management teamfollowing a turbulent period. CFO Siddhartha Sankaran and AIGCommercial CEO Robert Schimek led the private meeting, devoting roughly twohours to answering analysts' questions about the company's prospects andstrategic initiatives. The discussion focused largely on AIG's efforts to fixits underperforming commercial insurance business, attendees said, as well asthe status of its expense and capital management plans.
TheWall Street Journal reported that AIG President and CEOPeter Hancock's total compensation climbed 3.6% to $12.5 million in 2015, eventhough the insurer's 2015 achievements were below target. The publication notedthat his base salary rose to $1.7 million from $1.4 million year over year. CFODavid Herzog, who is leaving the insurer in April, earned $6.7 million,representing a 13% decline from 2014.
StateFarm Mutual Automobile Insurance Co. launched Dover Bay SpecialtyInsurance Co., a newly formed domestic surplus lines insurer based inBloomington, Ill. that will write homeowners insurance in selected markets on anon-admitted basis. A.M. Best assigneda financial strength rating of A and an issuer credit rating of "a"to Dover Bay Specialty Insurance.
Representatives of some of Puerto Rico's creditors metto draft a restructuringplan that would cut the commonwealth's $70 billion in obligations to showfederal lawmakers that creditor groups and bond insurers can create a unifiedstrategy to resolve the debt crisis, Bloomberg News reported, citing "fourpeople with direct knowledge of the talks." The news about the meetingcame just as the House Natural Resources Committee unveiled a draft bill thatwould give a control board the authority to handle the island's restructuringand annual budgets.
Height Securities said the draft bill would benefitbondholders and insurers because having a federal control board manage thereduction of the island's debt would result in zero losses on generalobligations, the publication reported separately. Sales-tax bonds would also belowered just 10%. Ambac FinancialGroup Inc., which insures about $7.3 billion of sales-tax debtservice payments, is poised to benefit the most from the bill.
Swiss ReLtd.'s latest sigma study revealed that global from natural catastrophesand manmade disasters in 2015 totaled $37 billion, well below the $62 billionaverage of the previous 10 years.
Moody's said accident avoidance technologies applied in cars couldboost insurers' profits in the medium-term. The rating agency noted, however,that in the long term self-driving cars could dramatically reduce auto insurers'profits as reduced accidents will translate to lower premiums. The impact canbe significant for the insurance sector as personal auto insurance is thelargest property and casualty insurance line of business in many countries,including the U.S.
The combination of conservative investmentphilosophies and the low-for-long interest rate environment has helped renderthe stated range for property and casualty company investment yields in theNAIC's Insurance Regulatory Information System, or IRIS, manual toreach.
Mergers and acquisitions in both insurancedistribution and insurance services increased 18% in the U.S. and 10% globally in 2015, astudy by Conning Inc.has found.
In deal news, The Brooks Insurance Agency mergedwith USI Insurance ServicesLLC.
Blue River Underwriters boughtPlatinum Program Managers and Insurance Services.
H.B.270, a bill that seeks to make changes to Alabama's captive insurancecompany statute, now heads to the state Senate after the state House passed itwith a 98-0 vote, Business Insurance reported.
In Florida, Gov. Rick Scott and the state Cabinet extendedthe deadline of applying for the state insurance commissioner position toApril 15.
Slice Labs Inc. secured$3.9 million in seed funding led by Horizons Ventures and XL Innovate. SliceLabs is an insurtech startup that plans to launch an on-demand insuranceplatform.
Inother parts of the world
AvivaPlc CEO Mark Wilson received total remuneration of £5.7 million in2015, up from £2.6 million a year ago, accordingto the company's 2015 annual report. Wilson's basic salary did not changeover the period, but he received a £2.6 million award under a long-termincentive plan. Aviva CFO Tom Stoddard received £2.9 million in totalremuneration in 2015, up from £1.2 million a year ago.
Chinese life insurers' premium insurance income surged63.79% year over year to 756.82 billion yuan in January and February, whileproperty insurers' premium income increased 9.91% to 149.92 billion yuan duringthe period, the Securities Times reported. Thecombined premium income of 25 life insurers surpassed 10 billion yuan in thesame period.
Korea Deposit Insurance Corp. recouped 520.3 billionwon from the sale of Hanwha LifeInsurance Co. Ltd. shares in the fourth quarter of 2015, YonhapNews Agency reported.Korea Deposit Insurance Corp. has been cutting its stake in Hanwha Life since1997 following an injection of 3.5 trillion won to nationalize the company.
The Wisconsin Office of the Commissioner of Insurancewill hold a public meetingregarding the pending merger of Aetna Inc. and Humana Inc.
Early morning futures indicators pointed to a higheropening for the U.S. market.
In Asia, the Hang Seng was up 2.15% to 20,803.39. TheNikkei 225 fell 1.31% to 16,878.96.
In Europe as of midday, the FTSE 100 rose 1.71% to6,210.52, and the Euronext 100 climbed 1.81% to 879.07.
Onthe macro front
The Bank Reserve Settlement, the ADP employment reportand the EIA petroleum status report are due out today.