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IMF warns of rising risk from life insurers to financial system; Ambac Financial eyes acquisition of CIFG Assurance North America

The contributionof life insurers in major advanced economies to financialsystem risk has increased since the global financial crisis, according to areport by the International Monetary Fund. The IMF noted that life insurers havebecome more exposed to swings in asset prices and are vulnerable to interest ratechanges, urging supervisors and regulators to take steps in tackling risks by adoptinga macro prudential approach. The IMF recommended valuing insurers' assets and liabilitiesat market prices and taking a closer look at the performance and behavior of smallerand weaker firms.

is to acquire , Reutersreported, citing "people familiar with the matter."

The DelawareInsurance Department signaledthat it would join the coalition of states collecting information on insurers' terrorismrisk exposure.

The NAICwill officially createa new panel focused on oversight of consumer operated and oriented plans, when itapproves the 2016 charge for the Health Insurance and Managed Care Committee's Co-OpSolvency and Receivership Subgroup.

Standard& Poor's Ratings Services expects global insurers to continue to participatein M&As in 2016 but at a slower pace. M&A activity of insurers in 2016 willbe fueled by record high capital in many segments, primarily reinsurance, limitedopportunities for organic growth, low or uncertain investment returns in domesticmarkets; and evolving regulation, including the Solvency II risk-based capital requirementsin Europe or the Affordable Care Act in the U.S., according to the rating agency.

Industrywideannuity sales in the fourth quarter of 2015 stood at $59.1 billion, up 4.4%from $56.6 billion in the prior-year quarter, according to final fourth-quarter2015 and full-year 2015 sales results for the U.S. annuity industry issued by theInsured Retirement Institute based on data reported by Beacon Research and MorningstarInc. Fixed annuity sales reached their highest mark during the fourth quarter of2015 since the first quarter of 2009 at $28.2 billion, up 22.5% from $23 billionin the year-ago quarter. Variable annuity sales dropped 8% to $30.9 billion in thefourth quarter of 2015 from $33.6 billion in the fourth quarter of 2014.

FarmersInsurance said it estimatesmore than $250 million in losses resulting from two severe weather systems thatcaused damage to homes and vehicles in the week of March 28 in Texas' Dallas-FortWorth area.

is thelargest of the three primary insurers that make up Farmers Insurance.

InMichigan, auto insurers are defending the taxcredit they receive as some of the state's lawmakers seek to repeal it, The Detroit News reported. Insurers wereable to claim a tax credit on the assigned claims of passengers and pedestriansinjured by uninsured drivers after the state Legislature let the Michigan AutomobileInsurance Placement Facility handle the state's assigned claims program. Some lawmakersclaim that the tax credit resulted in an out-of-balance state budget, but insurersand supporters argue that removing it could result in rate hikes.

Lawmakersin Vermont adopted a billthat would enable certain captive insurance companies that are not writing businessto enter a dormant status, Business Insurancereported.

The Centersfor Medicare & Medicaid Services releasedthe final 2017 payment and policy updates for the Medicare Advantage and Part DPrescription Drug Programs. On average, theexpected revenue change is 0.85% without accounting for the expected growth in codingacuity that has typically added another 2.2%.

Inexecutive moves, Centene Corp.appointed Mark Brookssenior vice president and chief information officer.

announcedthe retirement of GaryMcCabe as senior vice president and CFO. Scott Ewert, vice presidentand CFO of E-L Financial Corp. Ltd.,will serve as interim CFO.

The averagereturn of the 31 insurance-linked securities investment funds that EurekahedgeILS Advisers Index tracks was 0.54% in February, Artemis reported. Some adjustmentsto loss reserves contributed to the "strongest" performance since September2015, according to the insurance-linked securities blog.

S&P Global Market Intelligence presents a on what's driving the discussionat the NAIC's Spring National Meeting.

In other parts of theworld

Chris Moulder, director of general insurance at the Bank of England,called on insurers to examine their capital levels as premium rates in several linesare expected to continue to fall in 2016, Reuters reported.Moulder said boards must be "relentlessly inquisitive" in understandingand challenging underwriting controls.

AXAclosedthe acquisition of Charter Ping An Insurance, the fifth-largest general insurerin Philippines for €40 million, Les Echosnoted.The deal was announced in November 2015.

Assets under management in India's life insurance sector stoodat 24.250 trillion rupees, Business Standardreported,citing Life Insurance Council General Secretary V. Manickam. The executive saidthe industry might reach 25 trillion rupees in fiscal 2015 to 2016.

The day ahead

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

In Asia, the Hang Seng was up 1.57% to 20,177.00, and the Nikkei225 fell 2.42% to 15,732.82.

In Europe as of midday, the FTSE 100 dropped 1.35% to 6,081.33,and the Euronext 100 was down 2.12% to 838.68.

On the macro front

The international trade report, Redbook, PMI services index andthe ISM non-manufacturing index are due out today.

S&P Ratings and S&PGlobal Market Intelligence are owned by McGraw Hill Financial Inc.