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Voya to up repurchases after annuities deal; tax cut to benefit US P&C carriers

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Voya to up repurchases after annuities deal; tax cut to benefit US P&C carriers

Confirming an earlier report, Voya Financial Inc. said it agreed to divest substantially all of its closed block variable annuity segment and its individual fixed and fixed indexed annuity business to an investor group led by affiliates of Apollo Global Management LLC, Crestview Partners, L.P. and Reverence Capital Partners LP. Following the sale, Voya expects immediately deployable capital in excess of $500 million, which it plans to use for additional share repurchases beyond its $1 billion existing authorization.

In more deal news, NFP Corp. acquired Benefits Network Inc., a Wexford, Pa.-based employee benefits broker specializing in group benefits and senior products.

Prudential Retirement Insurance & Annuity Co. and Legal & General Group Plc completed their sixth longevity reinsurance transaction since 2014. The unit will assume longevity risk for approximately $800 million in pension liabilities, covering more than 2,000 pensioners, held by Legal & General as part of its bulk annuity business.

StarStone Underwriting Ltd., the Lloyd's managing agency of Enstar Group Ltd., agreed to undertake a reinsurance-to-close transaction with Neon Underwriting Ltd. Enstar expects to assume net reinsurance reserves of £417.1 million, or about $558 million, relating to the portfolio and gross reserves of about £504.2 million, or roughly $674.5 million.

Elsewhere, as Congress approved the Republican tax plan that is very likely to become law, media outlets discussed the impact of the sweeping legislation on the insurance industry.

Analysts expect the cut in the corporate tax rate to result in a double-digit EPS growth in 2018 for P&C carriers in the U.S., The Insurance Insider said. According to a report in the Financial Times, Lloyd's of London and insurance companies in Bermuda and continental Europe are seen as potential losers from a new tax on cross-border flows of insurance cash.

Realized gains on the surrender of Bank of America Corp. preferred stock and the exercise of warrants to purchase common stock during the third quarter by the property and casualty units of Berkshire Hathaway Inc. kept the industry from posting its first statutory net loss since the second quarter of 2011, according to an S&P Global Market Intelligence report.

State Farm and Aflac Inc. agreed to pay $250,000 and $350,000, respectively, under multistate settlements related to their use of the Social Security Administration's death master file database.

Independence Holding Co.'s board increased the company's semiannual cash dividend by 67% to 10 cents per share.

In people news, Colorado Gov. John Hickenlooper chose Michael Conway as the state's interim insurance commissioner, effective Jan. 1, 2018. Marguerite Salazar, who became insurance commissioner in 2013, has decided to step down from the role.

Featured news

Pfizer, Merck get FDA approval for diabetes drug; tax bill delivers blow to ACA: A new analysis by the Georgetown University Health Policy Institute found that more than 1.9 million children in 23 U.S. states could lose health coverage at the start of next year if Congress fails to renew federal funding for the Children's Health Insurance Program, or CHIP, The New York Times wrote.

Financial news in other parts of the world

Asia-Pacific: New Zealand rejects HNA's UDC Finance bid; Thailand maintains policy rate

Europe: EU banks can keep UK ops post-Brexit; job cuts at Deutsche; Sweden holds rate

Middle East & Africa: ANC calls for SARB nationalization; Reserve Bank of Malawi cuts policy rate

Latin America: Santander Brasil, HDI Seguros insurance deal; Peru president faces congress vote

The day ahead

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

In Asia, the Hang Seng rose 0.45% to 29,367.06, and the Nikkei 225 was down 0.11% to 22,866.10.

In Europe, as of midday, the FTSE 100 was up 0.37% to 7,553.33, and the Euronext 100 fell 0.03% to 1,038.96.

On the macro front

The GDP report, the jobless claims report, the Chicago Fed national activity index, the FHFA house price index, the leading indicators , the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.