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Higher cat losses, pricing pressure to hit US P&C insurers in '16; Ironshore files for IPO


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Higher cat losses, pricing pressure to hit US P&C insurers in '16; Ironshore files for IPO

Inthe news

The U.S. property and casualty insurance industry'scombined ratio willcreep closer to 100% in 2016, according to S&P Global Market Intelligence'snew five-year outlook for the sector. Higher losses from catastrophes and inthe private-passenger auto business will combine with pricing pressure incommercial lines to weigh on the industry. S&P Global Market Intelligenceprojects a statutory combined ratio of 99.5% in 2016, up from 97.6% in 2015.Pretax returns on equity are also expected to deteriorate, according to thereport.

Ironshore Inc. has filed for an IPO, about a month after its parentcompany, Chinese conglomerate Fosun International Holdings Ltd., sought from the Hong Kongstock exchange for spinning off the Bermuda-based insurer.

HealthChoice Insurance Co. will not participate in Arizona's health insuranceexchange in 2017, The Arizona Republicreported, citing company officials. Laura Waugh, communications director atHealth Choice, said the decision to drop out of the exchange was driven by thebusiness and regulatory uncertainties associated with the marketplace. Thecompany's non-ACA marketplace plans will not be impacted.

The health insurance industry could see moreacquisitions of smaller insurers should the U.S. Department of Justicesucceed in blocking the pending mergers between and , and and , Reuters reported.Midsized, national players in government health care plans such as , and aremore likely to be a deal target because they offer footholds in markets thathave high growth potential.

TheNew York Times and TheWall Street Journal carry opinion pieces related to the JusticeDepartment's lawsuit.

SyncoraGuarantee Inc. reached an agreement in principle for the settlement ofits sole existing claim and related litigation with andStructured Asset Securities Corp.

The Republican National Convention wrapped up Thursdaynight and the Democratic National Convention gets underway July 25. S&PGlobal Market Intelligence offersa snapshot of the two parties' platforms to see how the economicand financial policies of Hillary Clinton and Donald Trump stack up.

In related news, presumptive Democratic presidentialnominee Hillary Clinton appointed Sen. Tim Kaine of Virginia as her running mate.

Financialnews in other parts of the world

Asia-Pacific: CCB injects capital into New Zealand unit; Fosun's Ironshore filesfor IPO

Middle East & Africa:

Europe: HSBC acts on RWAs; BBVA plans layoffs; Bank Asya loseslicence

Theday ahead

EverestRe Group Ltd. and W. R.Berkley Corp. are expected to report earnings today.

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

In Asia, the Hang Seng climbed 0.13% to 21,993.44,while the Nikkei 225 slid 0.04% to 16,620.29. In Europe, around midday, theFTSE 100 was up 0.02% to 6,731.67 and the Euronext 100 0.67% higher to 875.16.

Onthe macro front

The Dallas Fed's manufacturing survey is due out today.