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Reinsurance prices fall; AIG, Arch complete purchases; Fidelis launches sidecar


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Essential IR Insights Newsletter Fall - 2023

Reinsurance prices fall; AIG, Arch complete purchases; Fidelis launches sidecar

Heavy natural catastrophe losses again failed to boost reinsurance prices overall at the Jan. 1 renewals, according to reinsurance brokers, although there were isolated increases in loss-hit lines of business. Property-catastrophe pricing fell 1.2%, according to JLT Re's rate-on-line index, after a 4.8% increase at the same point in 2018, and rate increases were restricted to classes of business that suffered large losses or where performance has deteriorated.

A host of transactions were completed around the turn of the year. Arch Capital Group Ltd. unit Arch Insurance Europe completed the acquisition of the U.K. commercial lines business owned by insurance broker The Ardonagh Group Ltd. and part of its geo underwriting operating segment, while Carlyle Group LP completed its acquisition of a majority stake in Sedgwick, an insurance solutions provider, from KKR & Co. and other investors.

Also, American International Group Inc. announced that AIG Life Ltd., a U.K.-based subsidiary of AIG Life & Retirement, completed the acquisition of specialist insurance provider Ellipse from Germany's Munich Re Co., while Generali completed a transaction that increased its stakes in its Indian Future Generali insurance joint ventures to 49% from 25.5%.

Life Insurance Corp. of India, wholly owned by the Indian government, through a preferential allotment of equity shares acquired a 29.41% stake in IDBI Bank Ltd. The transaction raised LIC's stake in the bank to 44.31% from 14.90% and decreased the Indian government's stake to 52.02% from 79.5%.

China Reinsurance (Group) Corp.India's Allahabad Bank and SBI Life Insurance Co. Ltd. signed a bancassurance agreement to sell the insurer's policies through the bank's branches, Press Trust of India reported.

Aflac Inc. made a $20 million minority equity investment in Singapore Life Pte. Ltd.

Kingsway Financial Services Inc. completed its change of jurisdiction of incorporation to the state of Delaware from the province of Ontario.

Chubb Ltd.'s Chubb European Group completed its redomicilation to France from the U.K. ahead of Britain's EU departure. The move also applies to Ace Europe Life SE.

Fidelis Insurance Holdings Ltd. launched a new Bermuda-domiciled special purpose insurer, Alturas Re Ltd., to provide collateralized capacity support for Fidelis' reinsurance portfolio, Artemis reported. The sidecar vehicle was launched with $55 million of capital.

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Despite capital competition, reinsurance pricing not soft, says industry veteran: Ted Blanch, a reinsurance industry veteran and CEO of startup broker Coin Re, does not believe that there is a soft market for property catastrophe reinsurance.

Yunfeng CEO: Technology will help MassMutual Asia attract more Chinese customers: Hong Kong-listed Yunfeng Financial also expects trade tensions between the U.S. and China to be a "long-standing issue," and that there will likely be "great market volatility" in 2019.

Strangfeld, M&A regulators among 2018's most influential in US insurance: Two M&A regulators and two CEOs with bold plans were among the most influential players in the U.S. insurance sector in 2018.

Drug companies open 2019 with price hikes; US FDA breaks approval records: Drugmakers boosted hundreds of medicines' prices by an average of 6.3% as of yesterday, The Wall Street Journal reported; and the U.S. FDA broke a number of records in 2018, including its all-time high in approving first-of-their-kind therapies.

In other parts of the world

Asia-Pacific: Sumitomo affiliate, Toyota unit to form JV; India's LIC names acting chair

Europe: Deutsche Bank chair rules out need for state aid; Carige capital woes in focus

Middle East & Africa: Sharjah boosts offer for Invest Bank; regulator weighs SABB-Alawwal Bank merger

The day ahead

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

In Asia, the Hang Seng fell 2.77% to 25,130.35, while Japanese markets were closed.

In Europe, around midday, the FTSE 100 decreased 0.82% to 6,672.97, and the Euronext 100 was down 1.36% to 904.15.

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 report and the Purchasing Managers' Manufacturing index report are due out today.

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