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Cat losses unlikely to dampen ILS growth; Aspen closes Bermuda unit

Reinsurers are being squeezed as loose monetary policy lets insurers spread risk in new ways, such as issuing bonds, which has pressured renewal rates, The Wall Street Journal reported. Reinsurers are facing competition from catastrophe bonds that offer relative yields of up to 8% and have been popular with investors after bond buying by central banks resulted in higher bond prices and lower yields.

Reinsurance renewal rates in June and July are unlikely to rise anymore than what was witnessed in January, Artemis reported, quoting Keefe Bruyette & Woods analysts, who said "sustained alternative capital inflows make January 1 reinsurance renewals more of a ceiling than a floor."

Bill Dubinsky, managing director and head of insurance-linked securities at Willis Towers Watson Securities, said ILS may continue to grow this year as investors responded to 2017 catastrophe losses with "growth and optimism," Artemis reported. In an interview with A.M. BestTV, Dubinsky also noted that advances in insurtech may disrupt the traditional insurance and reinsurance model.

Wisconsin's health insurance providers, doctors and medical community have endorsed Gov. Scott Walker's $200 million plan to cut healthcare costs for people opting to buy healthcare from the private marketplace, Insurance Journal reported.

Aspen Insurance Holdings Ltd. has closed its U.S. property insurance unit in Bermuda after the company posted an operating loss of $178.1 million for the fourth quarter of 2017, The Royal Gazette reported.

The Hartford Financial Services Group Inc. agreed to acquire The Farmers Exchanges' Foremost-branded small commercial business sold through independent agents pursuant to a renewal rights agreement.

One of the holders of Scottish Re Group Ltd. subsidiary trust preferred securities is among several parties urging a federal bankruptcy judge to slow the process that could culminate in the sale of Scottish Annuity & Life Insurance Co. (Cayman) Ltd. and Scottish Re (U.S.) Inc. The matter is scheduled to be addressed during a Feb. 21 hearing in the U.S. Bankruptcy Court in Delaware.

A shareholder sued General Electric Co., accusing it of hiding rising insurance liabilities and a U.S. Securities and Exchange Commission probe, Reuters reported. Cleveland Bakers and Teamsters Pension Fund filed the complaint. The company had said in January it would take a $6.2 billion pretax charge and put aside $15 billion in reserves to help cover insurance operations held by its unit. It also revealed that the SEC was probing its handling of insurance obligations among other things.

Featured news

Albertsons to buy rest of Rite Aid; J&J eyes sale of sterilization unit: Merck & Co. Inc. CEO Kenneth Frazier told The New York Times that President Donald Trump's unwillingness to condemn white nationalists led the drug company chief to decide it was time to take a stand.

Financial news in other parts of the world

Asia-Pacific: SoftBank wants to join Swiss Re board; Reliance heads US$9.3B digital investment

Europe: Spain's De Guindos set to take key ECB post; HSBC FY'17 profit up on Asia growth

Middle East & Africa: Saudi cabinet approves bankruptcy law; Capitec Bank 'back to normal'

Latin America: Supervielle, Banco Macro Q4'17 profits jump; ex-Caixa VP acquitted

The day ahead

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

In Asia, the Hang Seng dropped 0.78% to 30,873.63, while the Nikkei 225 dropped 1.01% to 21,925.10.

In Europe, around midday, the FTSE 100 was down 0.11% to 7,240.23 and the Euronext 100 was down 0.03% to 1,016. 14.