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AMA wants CVS/Aetna blocked; fresh Icahn salvo; UK's Prudential keeping Asia biz

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Q&A: Navigating Climate Risk as a Financial Risk

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AMA wants CVS/Aetna blocked; fresh Icahn salvo; UK's Prudential keeping Asia biz

The American Medical Association urged the U.S. Department of Justice to reject CVS Health Corp.'s pending acquisition of Aetna Inc. because it would "substantially lessen" competition in Medicare Part D, pharmacy benefit manager services and many local retail pharmacy markets.

Cigna Corp. is "disappointed" that Carl Icahn chose an open letter instead of airing his grievances directly with the company regarding its pending acquisition of Express Scripts Holding Co., CEO David Cordani said during an appearance on CNBC. He also said his company has had "very good engagement" with proxy advisory firm ISS, which is expected to give its recommendation Friday.

Meanwhile, Icahn continues his campaign against the deal, releasing a fresh letter to Cigna shareholders today in which he says he expects the rebates that are "responsible for Express Scripts' profitability" will ultimately be legislated out of existence. He reiterated that shareholders should vote against a transaction "that might turn out to be the worst deal in history."

It's another busy day for earnings in the insurance sector. Germany's Hannover Re reported an increase in its second-quarter bottom line thanks to "very moderate" expenditure on large losses but pointed to at least a $264 million hit to earnings in the second half due to actions taken in its U.S. mortality business.

U.K.-based Legal & General Group PLC said, meanwhile, that it expects to release between £300 million and £400 million of reserves given statistics that show mortality trending higher than had previously been expected.

Zurich Insurance Group AG reported first-half after-tax net income attributable to shareholders of $1.79 billion, up from $1.50 billion in the prior-year period. It does not plan to sell assets to achieve targeted cost savings, CEO Mario Greco said, according to Reuters. The company has achieved $900 million of a planned $1.5 billion in savings and will reduce IT expenses to achieve the rest.

Australia-based Suncorp Group Ltd.'s full-year net profit declined 1.5% year over year. It also announced the sale of its Australian life insurance business to TAL Dai-ichi Life Australia Pty. Ltd. for approximately A$725 million. Shares in the company closed up 4.74%.

Japan-based Sony Life Insurance Co. Ltd., Sumitomo Life Insurance Co., Dai-ichi Life Holdings Inc. and Meiji Yasuda Life Insurance Co. also reported results. Click here for a roundup of earnings reported yesterday by select insurance companies covered by S&P Global Market Intelligence.

UnitedHealth Group Inc. has agreed to buy Genoa Healthcare LLC, which operates pharmacies in community mental health centers, from Advent International Corp., a source told Axios.

Britain's Prudential PLC is not in any talks to sell its Asian operation and does not have any imminent plans to follow Axa in spinning off its U.S. business, CEO Mike Wells said during an earnings conference call yesterday. The Asian business was the best-performing of Prudential's three geographic units in the first half as measured by operating profit.

Belgium's Ageas SA/NV is interested in boosting its position in the nonlife insurance market in Belgium and Portugal through acquisitions, CEO Bart De Smet said.

The U.S. National Association of Insurance Commissioners voted to establish a cannabis insurance working group to address the issue of insurance availability for the legalized cannabis industry. California Insurance Commissioner Dave Jones was appointed chair of the group.

This year has so far seen $11 billion in catastrophe bonds and related insurance-linked securities issuance, outpacing that in 2017, according to Artemis. The outstanding market amounts to $36 billion.

Insurers will need to re-evaluate wildfire risks in California, given that the "highly destructive" current and 2017 wildfires predominantly are occurring or did occur in areas classified as low to moderate risk, A.M. Best said. "A.M. Best believes insurers' risk-scoring models likely need adjusting with more improved loss-reduction strategies put into place to reflect this new normal," the rating agency said.

Now featured on S&P Global Market Intelligence

Data Dispatch: Majority of Bankers Life legacy LTC policy forms were first issued prior to 2003: Nearly twice as many in-force policies were issued before 2003 than after, S&P Global Market Intelligence data shows.

Data Dispatch: Progressive, Nationwide, Liberty Mutual raise commercial auto rates in H1'18: Subsidiaries of Progressive saw 25 rate requests approved in 22 states in the period, potentially increasing premiums by $85.9 million.

US lawmaker accused of pharma insider trading; Perrigo to hive off pharma assets: New York Republican Rep. Chris Collins is facing insider trading charges over his dealings with Australia-based Innate Immunotherapeutics; and Ireland-based Perrigo plans to divest its prescription pharmaceuticals business.

In other parts of the world

Asia-Pacific: Dai-ichi Life unit to buy Suncorp life business; New Zealand holds cash rate

Europe: Prudential, L&G, Zurich report earnings; Italy eyes Monte dei Paschi sale

Middle East and Africa: Mizrahi Tefahot will not settle US probe for $342M; Saudi-Canada row escalates

The day ahead

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

In Asia, the Hang Seng climbed 0.88% to 28,607.30, while the Nikkei 225 fell 0.20% to 22,598.39.

In Europe, around midday, the FTSE 100 fell 0.72% to 7,721.01, and the Euronext 100 was down 0.31% to 1,074.53.

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 jobless claims report, the PPI-FD report, the wholesale trade report, the EIA natural gas report, the fed balance sheet and the money supply report are due out today.

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