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Insurers bump up insurtech investments; Cigna and Radian report earnings

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Insurers bump up insurtech investments; Cigna and Radian report earnings

According to the latest Quarterly InsurTech Briefing from Willis Towers Watson, insurers and reinsurers are increasing investments in insurance technology and expanding their focus to invest in technologies that could potentially apply to their core businesses. Insurance companies made 35 private technology investments in the fourth quarter of 2017 and 120 investments in 2017, the highest totals recorded in any quarter and year to date, respectively.

Allianz Global Corporate & Specialty SE is acquiring the renewal portfolio of Liberty Mutual Insurance Co.'s U.S. product recall and special contingency business, written through Liberty International Underwriters U.S., effective Jan. 30.

Earnings: Cigna Corp. reported fourth-quarter 2017 adjusted income from operations of $483 million, or $1.94 per share, compared to $485 million, or $1.87 per share, in the year-ago period.

Radian Group Inc. reported fourth-quarter 2017 net income of $6.8 million, or 3 cents per share, down from $61.1 million, or 27 cents per share, in the year-ago quarter.

Marsh & McLennan Cos. Inc. reported fourth-quarter 2017 net income attributable to the company of $29 million, or 6 cents per share, compared to $436 million, or 85 cents per share, in the year-ago period.

Validus Holdings Ltd. and XL Group Ltd are also expected to report earnings today.

Click here to read a summary of earnings reported Jan. 31 by select insurance companies covered by S&P Global Market Intelligence.

Hedge fund reinsurer Third Point Reinsurance Ltd. reported positive returns on its investment portfolio in January, while Greenlight Capital Re Ltd. posted losses in the month. Investment returns on Third Point Re's portfolio increased 4.0% in the month, and Greenlight Capital Re was down 5.5% in January.

Issuance of insurance-linked securities in the second half of 2017 totaled $2.13 billion, the smallest second half since 2009, with new issuance being "exceptionally slow" during the period, according to Swiss Re's latest ILS market update.

Insurers received nearly 45,000 claims and saw losses of over $11.79 billion from the wildfires that raged across California in October and December 2017, according to California Insurance Commissioner Dave Jones.

The new joint enterprise by Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. to combine their business savvy and market forces to deliver simple, high-quality, transparent healthcare at a reasonable cost for their 1 million employees has piqued the interest of some in Washington. Berkshire Chairman and CEO Warren Buffett acknowledged the three companies were not coming to the new venture with ready-made answers on how to rein in the ballooning U.S. healthcare costs, which he called a "hungry tapeworm on the American economy."

The joint healthcare venture could take many shapes, including the formation of a pharmaceutical company or hospitals, an executive at one of the companies told S&P Global Market Intelligence. The executive, who spoke on background, made clear that no definitive plans have been made for the organization and that discussions are in the early stages.

Cigna said it will apply some of the net financial benefits from the U.S. tax reform to raise its minimum wage to $16 per hour and add $30 million to its 401(k) employee retirement matching program. The company will also use $15 million to increase salaries, mostly for front-line employees.

Featured news

Roche CEO optimistic on new drug sales; Chugai, Takeda's earnings jump: Roche's CEO said Ocrevus and Tecentriq sales will help offset losses as cancer drugs go off patent; Japan's Chugai saw a 35.7% year-over-year jump in net income in 2017; while compatriot Takeda saw a a 45.4% increase in nine-month profit.

Financial news in other parts of the world

Asia-Pacific: South Korea files charges against 5 banks; Chinese bank raises 2.53B yuan in IPO

Europe: Telefónica hit dents BBVA's Q4'17 profit; EU-wide bank stress test launched

Middle East & Africa: Capitec shares fall after Viceroy report; Commercial Bank sets focus on Turkey

Latin America: Scotiabank in deal with Citi Colombia; Bradesco's Q4 profit jumps 10.9%

The day ahead

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

In Asia, the Hang Seng was down 0.75% to 32,642.09. The Nikkei 225 rose 1.68% to 23,486.11.

In Europe as of midday, the FTSE 100 slid 0.03% to 7,531.36, and the Euronext 100 was up 0.38% to 1,067.00.

On the macro front

The motor vehicle sales report, the Market Focus report, the jobless claims report, the PMI Manufacturing index, the ISM manufacturing index, the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.