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Prudential SIFI vote due; insurers to absorb Michael hit; Manulife criticized

The U.S. Financial Stability Oversight Council could vote on whether to remove U.S. insurer Prudential Financial Inc.'s "systemically important financial institution" designation at a meeting tomorrow, Bloomberg News reported.

According to Fitch Ratings, the property and casualty insurance and reinsurance industry is well-positioned to absorb losses arising from Hurricane Michael, although the storm will push 2018 "closer to a more normal catastrophe loss year" after a quiet first half. Fitch projected that Michael will ultimately generate losses lower than the $13.0 billion generated by Hurricane Ivan in 2004.

Meanwhile, CoreLogic Inc. revised its Michael loss estimates upwards to between $3 billion and $5 billion from $2 billion to $4.5 billion.

The P&C group of Cincinnati Financial Corp.'s Cincinnati Insurance Cos. expects to record pretax catastrophe losses of about $120 million in its third-quarter results. The estimates include about $92 million for Hurricane Florence.

U.S.-based Federal Life Group Inc. filed a registration statement for an initial public offering of 4.6 million common shares at a price of $10 apiece, or an aggregate of $46 million. The IPO is connected to the conversion of Federal Life Mutual Holding Co. to a stock company from a mutual company.

German insurtech DFV Deutsche Familienversicherung AG plans to launch an IPO on the Frankfurt Stock Exchange in the fourth quarter. The listing is expected to generate proceeds of €100 million.

Several shareholders in Manulife Financial Corp. have criticized it over its failure to reveal details of an ongoing court case, after Muddy Waters Capital LLC disclosed a short position in the Canadian insurer and said it could face billions in losses, Reuters reported. Shareholders said that even though Manulife believes that the case may not have a material impact, it still should have been more forthcoming in disclosing the proceedings.

The U.S. Federal Trade Commission granted an early termination of the waiting period under the Hart-Scott-Rodino Act regarding Marsh & McLennan Cos. Inc.'s pending acquisition of Jardine Lloyd Thompson Group PLC. Termination of the waiting period effectively concludes the competition review of both the FTC and the U.S. Department of Justice.

Germany's ERGO Group AG agreed to sell its Russian life insurance business to Russia's Rosgosstrakh Insurance Co. (PJSC).

Dallas-based insurance broker Southwest Risk LP has started a sale process and already received initial bids, The Insurance Insider reported. RT Specialty, USI, AmWins and financial investors are reportedly among the first-round bidders.

The Philippines is considering sponsoring a catastrophe bond issuance, which would be carried out by the World Bank to help cover disaster-related risks in the country, although Artemis noted that the Philippines has been considering such a transaction for nearly a decade without going through with one.

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Cincinnati Financial sets plan to pull Munich Re Lloyd's biz back to profit: MSP Underwriting's leaders offered a growth plan that will diversify premiums and change its business mix, Cincinnati Financial President and CEO Steven Johnston said during a call to discuss the company's pending deal for the Munich Re business.

US P&C stocks fall as Hurricane Michael ravages Florida, broader market tumbles: Despite its historic ferocity, Hurricane Michael is not expected to be a "market-changing event" for the property and casualty industry.

Roche's breast cancer drug Kadcyla beats Herceptin; Medicare to hike rates: Roche said Kadcyla is better than Herceptin in lowering the risk of disease recurrence in early breast cancer patients; and the Centers for Medicare and Medicaid Services will raise the premium and deductible rates for Medicare parts A and B.

In other parts of the world

Asia-Pacific: CBA appoints CFO; KKR eyes Indian portfolios; ANZ to expand again in Asia

Europe: UK firms warned on climate change; German online bank N26 in breach of rules

Middle East & Africa: Saudi stocks slump after US threat; StanChart to launch digital bank in Ghana

The day ahead

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

In Asia, Hang Seng dropped 1.38% to 25,445.06, while the Nikkei 225 fell 1.87% to 22,271.30.

In Europe, around midday, the FTSE 100 shed 0.06% to 6,991.79, and the Euronext 100 dropped 0.38% to 985.06.

Click here to read about today's financial markets, laying out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

On the macro front

The retail sales report, the Empire State Manufacturing Survey and the business inventories report are due out today.

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