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XL Group to be acquired by Axa; AIG to sell travel insurance on Expedia site

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XL Group to be acquired by Axa; AIG to sell travel insurance on Expedia site

France-based AXA agreed to acquire XL Group Ltd, a global property and casualty commercial lines insurer and reinsurer, for a total cash consideration of $15.3 billion. The deal would make the combined company the largest P&C commercial lines insurer in the world based on gross written premiums, Axa CEO Thomas Buberl said in a statement. The combined entity would have generated €30.2 billion in gross written premiums in 2016.

The need for scale to compete in today's global insurance market helped persuade XL Group to sell to AXA, XL CEO Mike McGavick said during a press conference. The capital consumed by the deal may mean that the French giant will not be able to return capital to shareholders through share buybacks, which CFO Gérald Harlin acknowledged may disappoint some analysts and investors. Axa's shares were down 8.8% as of just after midday Paris time. Analysts at German brokerage Bankhaus Lampe said the deal consideration appears to be too high, although XL is a great fit for AXA, Reuters reported.

American International Group Inc. said it has been picked as Brand Expedia Group's global provider of travel insurance and assistance products. Expedia Inc.'s insurance partner Aon Affinity Travel Practice will keep providing advisory services to it and delivering customer claim services in the U.S.

The Government Accountability Office, which provides nonpartisan information to Congress, said in a report that the Centers for Medicare & Medicaid Services' approach in overseeing state-led evaluations of Medicaid demonstrations has resulted in gaps in evidence on policies that may improve state Medicaid programs. The New York Times has a report on the matter.

A Los Angeles Superior Court jury has concluded that Massachusetts Mutual Life Insurance Co. did not improperly withhold dividends from a class of hundreds of term life insurance policyholders.

Safepoint Insurance Co. has made a return to the catastrophe bond market, looking to secure about $165 million of coverage through a multi-peril Manatee Re II Ltd. (series 2018-1) deal, Artemis reported. The company plans to take advantage of the robust demand for cat bonds among investors and lock in coverage even before the commencement of the midyear renewal discussions, the blog noted.

Artemis said in another post that Gemini Re LLC plans to secure up to $750 million of reinsurance capacity by June to launch in time for the mid-year 2018 reinsurance renewals.

Featured news

Merck KGaA, Pfizer cancer drug bags UK nod; US lawmakers probe flu vaccine: U.S. Food and Drug Administration Commissioner Scott Gottlieb, National Institute of Allergy and Infectious Diseases Director Anthony Fauci and Biomedical Advances Research and Development Authority Director Rick Bright were also among those who were summoned by the House Energy and Commerce Subcommittee on Oversight and Investigations.

Financial news in other parts of the world

Asia-Pacific: China plans economic supervision overhaul; Australian asset manager mulls M&A

Europe: Axa agrees to buy XL Group for $15.3B; Germany's Merkel secures 4th term

Middle East & Africa: Angola hikes capital requirements for banks; Netanyahu opposes early elections

Latin America: Santander Brasil-HDI JV approved; Mexico gives nod to Swiss Re local ops

The day ahead

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

In Asia, the Hang Seng declined 2.28% to 29886.39. The Nikkei 225 slid 0.66% to 21,042.09.

In Europe as of midday, the FTSE 100 rose 0.20% to 7,083.92, and the Euronext 100 added 0.44% to 1,002.59.

On the macro front

The US Services Purchasing Managers' Index, the Institute For Supply Management non-manufacturing index, and the TD Ameritrade Investor Movement Index are due out today.