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Analysts warn of Q2 cat losses impact; Florida to hold hearings on large rate hike requests

Inthe news

Analysts at Keefe Bruyette & Woods Inc. and MorganStanley warned that the second-quarter results of insurers are poised to reportsome catastrophe-related losses. BusinessInsurance reported that KBW expects total global insured catastrophe lossesto surpass $12billion in the second quarter, while Artemis said Morgan Stanleyanticipates losses to hit $14billion. KBW said losses from catastrophic events including the FortMcMurray wildfires in Alberta, Texas hailstorms and flooding, and Japanearthquakes are expected to "pierce reinsurance layers," which couldimpact results. Morgan Stanley analysts also expect insurers to feel somepressure from catastrophe losses, but they said the softening market willlikely continue.

Some insurers, including ,XL Group Plc andAssurant Inc. havereleased their estimatedcatastrophelosses for the secondquarter.

Florida Insurance Commissioner David Altmaier said thestate's Office of Insurance Regulation would hold separate to specifically discussa series of rate increases requested by MetLifeInc.'s MetropolitanLife Insurance Co. and UnumGroup's Unum LifeInsurance Co. of America.

ChubbLtd.'s VigilantInsurance Co. and other insurers losttheir bid to dismiss a suit filed by JPMorganChase & Co. to seek reimbursement for Bear Stearns Cos.' March2006 settlement with regulators, Bloomberg News reported. When JPMorganacquired Bear Stearns, the bank had to pay the $250 million settlement.JPMorgan sued after insurers refused to cover the settlement.

The U.S. will see slower growth in healthspending at 4.8% in 2016 compared with 5.5% in 2015 as enrollment in Medicaidand Affordable Care Act plans slows and the declines in the number of theuninsured falls, according to the Centers for Medicare & Medicaid Services,which cited a report authored by its Office of the Actuary. The insured shareof the population will continue to climb to 92% by 2025 from 89% in 2014.Average annual growth of private health insurance expenditures are expected tobe at 5.4% through 2025.

The National Association of Mutual Insurance Companieslaudedthe passage by the U.S. Senate of a bill that reauthorized the Federal AviationAdministration, the Insurance Journal reported.A provision of the bill would allow insurers to use drones in surveying damagesfollowing natural disasters, according to the report.

Assurant finalizeda $1.4 billion property catastrophe reinsurance program for 2016.

Twelve Capital completed the issuance of a $14.6 million Dodeka IXprivate catastrophe bond, Artemis reported.

Also, Blue Cross Blue Shield of Michigan Tiffany Albert aspresident and CEO of its health maintenance organization, Blue Care Network, Crain's Detroit Business reported.

Financialnews in other parts of the world

Asia-Pacific: Citito boost Asia corporate banking biz; BTMU to quit as Japanese government bonddealer

Middle East & Africa:

Europe: Banksreassured over capital buffers; LSE-Deutsche Börse merger protest; Spanishbanks get relief

Theday ahead

U.S. markets are expected to start the day's tradingon a higher note as the Nasdaq composite index, the S&P 500 and the DowJones Industrial Average were trading above fair value in early morning futurestrading.

In Asia, the Hang Seng rose 1.12% to 21,561.06, andthe Nikkei 225 was up 0.95% to 16,385.89.

In Europe as of midday, the FTSE 100 was up 0.89% to6,729.67, and the Euronext 100 had climbed 0.94% to 868.64.

Onthe macro front

The jobless claims report, the PPI-FD report, the EIAnatural gas report, Bloomberg Consumer Comfort Index, the Fed balance sheet andthe money supply report are due out today.