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London insurers could manage $200B loss; NN Group ups Delta Lloyd offer

S&P Global Market Intelligence offers our top picks of insurance news stories and more published throughout the week.


* Members of the U.K.'s House of Commons voted overwhelmingly in favor of a bill that would give Prime Minister Theresa May the authority to trigger Britain's departure from the European Union.

* The U.K. government published a so-called white paper on its strategy for negotiating the country's departure from the EU. It broadly reflects the 12 priorities Prime Minister Theresa May laid out during a Jan. 17 speech, which include controlling immigration and "taking control of our own laws," as well as providing as much certainty as possible throughout the process and securing free trade with the EU and new trade agreements with other countries.

* Meanwhile, a "badly designed" final Brexit deal would not only damage the economy of the U.K. but also those of the remaining EU member states, The Guardian reported, citing a leaked report from the European Parliament's committee on economic and monetary affairs. The leaked report, which noted that U.K. financial services constitute 40% of Europe's AUM and 60% of its capital markets business, warned that the European Commission's Brexit negotiators should reach a "workable" deal with the U.K. government to protect the City of London.

$200B in insured losses manageable by UK insurers

* Some 17 insurers and brokers including Hiscox Ltd., RSA Insurance Group Plc, Aon Plc and Lloyd's of London participated in a study that examined the impact of a theoretical two-week series of events, comprising a cyberattack cutting power supply across 15 U.S. states, a 16.2% drop in the stock market, a Category 5 hurricane in Miami, Florida, and the failure of a major reinsurer. The study found that U.K. insurers would have enough practical and financial resources to cope with subsequent losses, pegged at $200 billion.

Denying M&A speculation

* Australia's QBE Insurance Group Ltd. dismissed media speculation that it was in discussions with Germany's Allianz Group about a possible takeover.

* Intesa Sanpaolo SpA denied speculation that it was working on an all-share bid for Generali. In response to rumors that Intesa was preparing a public exchange offer for Generali, it reiterated that only "possible industrial combinations" with the Italian insurer are under consideration.

On the deal table

* NN Group Bidco BV, a wholly owned subsidiary of NN Group NV, made an all-cash public cash offer of €5.40 for each issued and outstanding ordinary share of Delta Lloyd NV. The offer represents a total consideration of €2.5 billion. Delta Lloyd had earlier rejected NN Group's initial unsolicited offer of €5.30 per share.

* Jardine Lloyd Thompson Group Plc acquired a majority stake in Construction Risk Partners LLC, a construction risk and surety specialty insurance broker in the U.S.

* The Ontario Municipal Employees Retirement System and Fairfax Financial Holdings Ltd. confirmed that the pension plan committed $1 billion in financing toward Fairfax's pending acquisition of Switzerland's Allied World Assurance Co. Holdings AG.

* CNP Assurances SA terminated its agreement to acquire a 51% stake in Pan Seguros SA and Pan Corretora from Banco BTG Pactual SA, saying that some of the conditions precedent to the deal's completion failed to be met.

In other news

* Switzerland-based insurer Chubb Ltd. reported after-tax operating income of $1.28 billion for the fourth quarter of 2016, up from $780 million in the year-ago period.

* Hannover Re increased its guidance for group net income in 2017 to more than €1 billion, up from more than €950 million previously.

Featured during the week on S&P Global Market Intelligence

Insurance risk market seen holding firm against falling yields: Investors in insurance-linked securities are refusing to accept further declines in yields, despite mismatch between capital and available risk.

'Little logic' in Allianz/QBE merger: Allianz may be on the lookout for acquisitions, but a tie-up with Australia's QBE looks unlikely despite the rumors, according to analysts.