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'Huge potential' for ILS at AIG; quake hits Japan; DOJ to OK healthcare deals


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'Huge potential' for ILS at AIG; quake hits Japan; DOJ to OK healthcare deals

American International Group Inc. CEO Brian Duperreault said at a conference that he sees "huge potential" for using insurance-linked securities within its portfolio and that it is a "good tool" for managing risk. "I think you're going to see more of it" at AIG, he said at the KBW insurance conference.

A magnitude 6.7 earthquake struck the Sapporo area of Hokkaido in Japan, killing at least seven people and causing damage to property, infrastructure and resulting in landslides that have engulfed houses in the mountainous region, Reuters reported. Insurance-linked securities and catastrophe bond investment manager Plenum Investments said the earthquake is not expected to cause hit the catastrophe bond market, Artemis reported.

According to the Willis Re reinsurance market report, first-half alternative capital increased year over year to $88 billion from $75 billion. Meanwhile, Aon said that amount of alternative capital in the insurance/reinsurance sector stood at $98 billion in the first half, while catastrophe bonds on-risk reached $30 billion, up from $4.2 billion a year ago.

Insured losses from Tropical Storm Gordon will be approximately $125 million, according to estimates from catastrophe modeler Karen Clark & Co.

Swells formed by Hurricane Florence will start to affect Bermuda on Friday and will reach certain areas of the U.S. East Coast over the weekend, according to the National Hurricane Center. The swells are expected to cause life-threatening surf and rip current conditions. Some weakening is forecast today, but Florence is expected to remain a strong hurricane for the next several days.

In the U.K., life insurer Just Group PLC dropped its half-year dividend and warned that proposed new rules from the Prudential Regulation Authority could result in a "material reduction" in its capital position.

In M&A news, China's Anbang Insurance Group Co. Ltd. selected JPMorgan to arrange the sale of its Netherlands-based subsidiary, VIVAT NV, Reuters reported. Anbang reportedly approached a number of investment banks in August to pitch for a role in the €1.4 billion to €1.8 billion sale.

The U.S. Department of Justice is close to approving CVS Health Corp.'s planned purchase of Aetna Inc. and Cigna Corp.'s planned acquisition of Express Scripts Holding Co., The Wall Street Journal reported. Stewart Information Services Corp. shareholders approved the company's planned merger with Fidelity National Financial Inc.

Israeli oil and gas conglomerate Delek Group Ltd. agreed to sell another 4.9% of Phoenix Holdings Ltd. for 263 million shekels to an unknown buyer, Reuters reported.

Canada-based Great-West Lifeco Inc. is looking to sell a block of insurance contracts worth about $2 billion, Reuters reported.

Saudia Arabia's Walaa Cooperative Insurance Co. said its board of directors resolved not to continue merger discussions with Al Sagr Cooperative Insurance Co. as such deal was deemed not feasible.

NI Holdings Inc. completed its acquisition of Chicago-based Direct Auto Insurance Co. from private shareholders.

Meanwhile, a U.S. District Court dismissed in entirety a derivative lawsuit filed in late 2017 against Aflac Inc. by three current or former independent agents. The former employees sued Aflac for allegedly lying to new employees about their expected wages, selling bundled products and policies to customers without their consent.

Brazil's Caixa Seguridade Participações SA signed confidentiality agreements with 14 global groups to negotiate a partnership in its businesses related to home insurance and letter of credit, auto and equity risks, Valor Econômico reported.

South African insurer Discovery Ltd. said it is on track to launch its own bank within the year after it agreed to acquire FirstRand Ltd.'s 25.01% stake in unit Discovery Bank.

And, Kingsway Financial Services Inc. appointed John Fitzgerald president and CEO, effective Sept. 5.

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Scor CEO slams timing of Covéa offer, defends reinsurer's independence: Denis Kessler told analysts and investors that the timing of the €43-a-share offer, so soon before annual Monte Carlo reinsurance renewal discussions, showed a lack of understanding about the industry.

Novartis to offload parts of Sandoz unit; Lilly sets Elanco price range: Novartis agreed to sell a portion of its generics unit's U.S. portfolio to India-based Aurobindo Pharma for $900 million; and Eli Lilly plans to raise $1.45 billion in proceeds for its Elanco Animal Health unit.

In other parts of the world

Asia-Pacific: Westpac weighs financial planning arm sale; Anbang taps JPMorgan for Vivat deal

Europe: Deutsche may have stalled illicit Danske money; Commerzbank falls out of DAX

Middle East and Africa: Saudi insurers end merger talks; Bahrain's Investcorp invests in Swiss lender

The day ahead

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

In Asia, Hang Seng fell 0.99% to 26,974.82, while the Nikkei 225 was down 0.41% to 22,487.94.

In Europe, around midday, the FTSE 100 was down 0.22% to 7,367.23, and the Euronext 100 fell 0.15% to 1,031.10.

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 ADP Employment report, the jobless claims report, the productivity and costs report, the PMI Services index, the factory orders report, the ISM's non-manufacturing index, the EIA natural gas report, the EIA petroleum status report, the fed balance sheet and the money supply report are due out today.

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