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Florence insured loss could be $20B; AIG shops quota share; pricing seen stable


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Florence insured loss could be $20B; AIG shops quota share; pricing seen stable

Hurricane Florence is now a category 4 hurricane and will move over the southwestern Atlantic Ocean between Bermuda and the Bahamas through Wednesday, and reach the coast of North Carolina or South Carolina on Thursday, according to the National Hurricane Centre. Storm surge and hurricane watches were issued for a stretch of the East Coast between Edisto Island, S.C., and the North Carolina-Virginia border. Florence is expected to produce total rainfall accumulations of 15 to 20 inches and may produce life-threatening flash flooding.

Risk Management Solutions estimated potential insured losses from Hurricane Florence at $15 billion to $20 billion, Bloomberg News wrote. State Farm Mutual Automobile Insurance Co., United Services Automobile Association, Berkshire Hathaway Inc., Allstate Corp. and Nationwide Mutual Group are the five largest personal lines insurance writers in South Carolina, North Carolina and Virginia, according to S&P Global Market Intelligence data. In the federal flood market, Assurant Inc., Selective Insurance Group Inc., The Hartford Financial Services Group Inc., Wright National Flood Insurance Co. and USAA are the five largest.

Hannover Re expects stability in prices and conditions overall for reinsurance treaty renewals at Jan. 1, 2019. The company said the market environment in worldwide property and casualty reinsurance remains challenging. Meanwhile, Swiss Re AG expects the pricing environment to be stable, and it said the biggest P&C insurance markets need to improve underwriting margins to achieve sustainable return on equity.

Investors may look to concentrate their dealings with managers of insurance-linked securities as the market matures, Willis Re International Chairman James Vickers told S&P Global Market Intelligence.

The U.S. commercial insurance sector saw prices increase by nearly 3% during the second quarter. Workers' compensation was the only standard surveyed line that continues to experience price cuts, according to a survey by Willis Towers Watson PLC.

Hamilton Insurance Group Ltd. plans to launch a U.S. reinsurance business that will target regional insurers looking to cede business, The Insurance Insider reported.

American International Group Inc. has begun marketing proportional and non-proportion quota share covers for its U.S. general casualty insurance business during the annual reinsurance Rendez-Vous in Monte Carlo, sources told the Insider. The proportional transaction would likely be a 30% quota share of a book with $2 billion in subject premiums, making it the largest new U.S. quota share deal in years.

Steve Hearn, CEO of U.K.-based Ed Broking, told S&P Global Market Intelligence that the company continues to hold discussions with prospective buyers but that majority owner Lightyear Capital is "not in any hurry" to sell the company.

French insurer Axa secured all regulatory approvals needed to complete its proposed acquisition of XL Group Ltd. The deal is expected to close Sept. 12, pending the satisfaction of the remaining customary closing conditions. Meanwhile, sources told The Insurance Insider that Axa had considered spinning off XL Re through a private sale as part of the overall takeover, but found little appetite among prospective buyers.

U.K.-based MS Amlin PLC entered a partnership with cyber insurance analytics firm Envelop Risk, Reinsurance News noted. Under the partnership, the companies will underwrite a cyber reinsurance portfolio with MS Amlin AG as a capacity provider.

Premera Blue Cross received federal approval for its acquisition of Soundpath Health Inc.'s Medicare Advantage contract. Soundpath Health customers will continue to receive their current benefits until the end of 2018.

Donegal Mutual Insurance Co. signed a deal that transfers its personal lines business in seven U.S. states to Safeco Insurance.

Security National Financial Corp.'s board authorized the repurchase of up to 300,000 of the company's class A common shares in the open market.

Hub International Ltd. acquired Ontario-based insurance solutions provider Clearwater Insurance Group Inc.

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Variable annuity business sale might make sense for Ohio National: Ohio National Financial Services' plans to stop writing variable annuities may be the precursor to a sale of the entire block.

Analysts split on Scor value after failed Covéa offer: Phillip Kett at Jefferies believes that Covéa's aborted €43-a-share offer undervalued Scor, but UBS's Jonny Urwin says the reinsurer would struggle to reach that value organically in the short term.

Broad Institute wins CRISPR fight; Merck & Co.'s antibiotic clears phase 3 trial: The U.S. Court of Appeals for the Federal Circuit upheld Broad Institute's CRISPR gene-editing patents; Merck & Co.'s antibiotic Zerbaxa worked as well as meropenem in treating two life-threatening hospital related lung infections.

In other parts of the world

Asia-Pacific: 3 foreign firms eye Reliance Home Finance stake; Fitch upgrades Thai banks

Europe: ING CFO resigns; Belfius IPO shelved; Aareal Bank to buy German peer

Middle East and Africa: Tadawul IPO won't take place in 2018; Nova Merchant Bank names acting CEO

The day ahead

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

In Asia, Hang Seng dropped 0.72% to 26,422.55, while the Nikkei 225 rose 1.30% to 22,664.69.

In Europe, around midday, the FTSE 100 fell 0.63% to 7,233.61, and the Euronext 100 shed 0.27% to 1,030.63

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

On the macro front

The Redbook Index for retail sales and the Labor Department's Job Openings and Labor Turnover Survey are due out today. The National Federation of Independent Business' index of small business optimism increased to 108.8 in August from 107.9 in July.

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