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Maria losses in Puerto Rico may exceed Harvey, Irma; $29B in disaster aid sought

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Maria losses in Puerto Rico may exceed Harvey, Irma; $29B in disaster aid sought

For insurers operating in Puerto Rico, Hurricane Maria could turn out to be more costly than expected, according to The Wall Street Journal. Making predictions about losses from the recent storm in the U.S. territory has proved to be difficult, the report noted, although such losses may well exceed those caused by hurricanes Harvey and Irma. A fallout of the costly loss event could be lower dividends and buybacks by insurance companies, but uncertainty in losses could also lead to premium hikes and higher returns on equity for insurers in the future.

The White House could send a $29 billion disaster aid request to the U.S. Congress today, The Associated Press reported. The disaster aid package combines about $16 billion for the government-backed flood insurance program with nearly $13 billion in new relief for hurricane victims.

Insurers continue to make projections about losses stemming from recent catastrophes. AmTrust Financial Services Inc. estimated its net loss exposure for third-quarter catastrophe activity at $40 million to $65 million. American Financial Group Inc. pegged its pretax loss from various catastrophe events in the third quarter of about $105 million, or 95 cents per share after tax.

Americans are divided on whether or not to accept driverless cars, a survey by American International Group Inc. shows. Of 1,000 people polled, 41% were not comfortable with the idea of sharing the road with driverless vehicles, while 42% were generally okay with it. About 39% of respondents identified lower insurance premiums as a compelling benefit of embracing autonomous vehicles. Bloomberg News has a report.

The Financial Stability Oversight Council did not review AIG under both standards it was obligated to consider when it removed the insurer's too-big-to-fail designation, Federal Housing Finance Agency Director Mel Watt told a U.S. House panel.

In deal news, White Mountains Insurance Group Ltd. agreed to acquire a 50% equity stake in DavidShield, a provider of expatriate medical insurance to individuals and corporations in Israel. DavidShield is White Mountains' joint venture partner in U.K.-based PassportCard, which offers insurance solutions for the travel industry.

In the managed care sector, Triple-S Management Corp. unit Triple-S Salud Inc. again extended its Medicaid contract with the Puerto Rico Health Insurance Administration to provide healthcare services to two regions of the island.

In an op-ed piece in the Journal, Scott Atlas finds fault with Republicans' approach of focusing on the number of people with health insurance as their efforts to repeal and replace the Affordable Care Act failed twice. He argues that Republicans should instead look at a reform that expands access to healthcare by reducing health costs and improving quality of care. Atlas is a senior fellow at Stanford's Hoover Institution and author of "Restoring Quality Health Care: A Six Point Plan for Comprehensive Reform at Lower Cost."

A report in the Insurance Journal put the spotlight on an insurance technology conference in Las Vegas, which drew attendance from several insurance companies such as Allstate Corp., AmTrust, Chubb Ltd. and Nationwide.

Featured news

Bayer/Monsanto deal held up in Brazil; Puerto Rico could imperil drug supply: Regulatory approval for Bayer's $66 billion takeover of Monsanto is being held up in Brazil; and the U.S. Food and Drug Administration head Scott Gottlieb warned of drug shortages if manufacturing facilities in Puerto Rico are not restored soon.

Financial news in other parts

Asia-Pacific: Barclays names regional banking head; Asian banks join hands for blockchain

Europe: UBS CEO expects huge job cuts; ECB drafts new NPL rules; Orange Bank to launch

Middle East & Africa: UAE banks intensify talks about Qatar exposures; Moody's reviewing Kenya

The day ahead

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

In Asia, the Hang Seng rose 0.73% to 28,379.18, and the Nikkei 225 was up 0.06% to 20,626.66.

In Europe, as of midday, the FTSE 100 dropped 0.07% to 7,462.69, and the Euronext 100 had fallen 0.30% to 1,041.48.

On the macro front

The MBA mortgage applications report, the ADP Employment Report, the PMI Services Index, the ISM non-manufacturing index report and the EIA petroleum status report are due out today.