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ACA mandate repeal could hurt health market; $136B in global insured cat losses


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ACA mandate repeal could hurt health market; $136B in global insured cat losses

The Senate voted 51-48 to pass the Republican tax bill early on the morning of Dec. 20 but the measure faces another vote before moving to the president. The House of Representatives must vote again on the Senate's version of the plan despite holding a vote on Dec. 19 because the House bill did not comply with Senate budget rules. Elsewhere, industry experts told S&P Global Market Intelligence that a provision in the tax cut bill to repeal the Affordable Care Act's individual mandate would undermine the health law's purpose of insuring more Americans, and that the impact on the health insurance industry could be severe.

Global insured losses resulting from natural and man-made disasters in 2017 will be approximately $136 billion, according to Swiss Re AG's preliminary sigma estimates. The figure is "well-above" the previous 10-year annual average, and the third highest since sigma records began in 1970. Natural catastrophes accounted for $131 billion of 2017 insured losses, and man-made disasters for the remaining $5 billion. Extreme weather in the U.S. in the second half of 2017 was the main reason for the significant full-year insured losses, Swiss Re said.

Insurance losses from a 1-in-100 year earthquake in California is expected to exceed $300 million with 300 fatalities, and a 1-in-250 year event could cause more than $1.4 billion in losses with more than 1,000 fatalities, Business Insurance reported, citing a report released by the Workers' Compensation Insurance Rating Bureau of California.

While it is still too early to assess the amount of insured losses following the Dec. 18 derailment of an Amtrak train in Washington, Inside FAC said that liability losses from the event are likely to fall between $40 million and $50 million and could be absorbed by Amtrak only.

In deal news, NFP Corp. acquired property and casualty broker TC Insurance Services, effective Nov. 1.

The $4.1 billion takeover of Kindred Healthcare Inc. by a consortium of Humana Inc. and two private equity firms has become the latest example of a deal pairing businesses once seen as strange bedfellows in the healthcare industry, according to an S&P Global Market Intelligence report. Humana joins rival insurers in branching out into other segments of the healthcare industry through acquisitions after two significant efforts to consolidate failed.

Jardine Lloyd Thompson Capital Markets Inc. closed private catastrophe bond Market Re 2017-2 weather at $14.5 million.

In people news, Blue Cross and Blue Shield of Kansas' board named Matt All, the company's executive vice president and general counsel, as its president and CEO, effective April 1, 2018. All will succeed Andrew Corbin, who is retiring March 31, 2018.

Steve Blakey was named president and CEO of Starr Insurance Holdings Inc.

Insurance startup Lemonade Inc. has raised $120 million in a series C funding round led by SoftBank Group Corp.

Trov Inc., a California-based on-demand insurance technology company, partnered with Alphabet Inc.'s self-driving technology unit, Waymo LLC, to provide trip-based insurance coverage for passengers of its forthcoming ride-hailing service.

Kingstone Cos. Inc. closed an underwritten public offering of $30 million of 5.50% senior unsecured notes due 2022.

Featured news

US lifts ban on 'monster germs;' senator says tax bill makes ACA unworkable: The FDA is proposing stricter rules for awarding orphan drug designations to therapies intended for children, saying it would only grant them if the use of the medicine in the pediatric subpopulation meets the regulatory criteria for an orphan subset, or if the disease in children is different from that in adults.

Financial news in other parts of the world

Asia-Pacific: Industrial Bank of Korea eyes M&A in Indonesia; Chinese lender gets HK license

Europe: Lloyd's changes strategy; Brydon keeps LSE chair post; BPM selling bad loans

Middle East & Africa: Takaful Emarat buying Al Hilal Takaful; Qatar launches currency-rigging probe

Latin America: BCI to buy Wal-Mart's Chilean financial biz; Bradesco compensates pension funds

The day ahead

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

In Asia, the Hang Seng fell 0.07% to 29,234.09, and the Nikkei 225 was up 0.10% to 22,891.72.

In Europe, as of midday, the FTSE 100 was down 0.12% to 7,535.33, and the Euronext 100 had fallen 0.39% to 1,041.90.

On the macro front

The Bank Reserve Settlement report, the MBA mortgage applications report, the existing home sales report, the EIA petroleum status report are due out today.