In the news
Hub International Ltd. and USI Insurance Services LLC are the frontrunners to acquire Wells Fargo & Co.'s insurance brokerage, The Insurance Insider reported. The bank is eyeing a fast-tracked sale process and is not keen on selling the unit to private equity buyers that don't own an insurance broking platform.
Five health insurers that will stay in Pennsylvania's Affordable Care Act health exchange in 2018 have filed for aggregate statewide rate increases of 8.8% for individual plans and 6.6% for small group plans. Pennsylvania Insurance Commissioner Teresa Miller warned that insurers could seek an estimated 23.3% statewide rate hike if the ACA individual mandate is repealed, and a 20.3% rate increase if the ACA cost-sharing reduction payments are discontinued. If both changes happen, the requested rate hike could reach 36.3%.
The California Senate passed a bill creating a single-payer healthcare system for all the state's residents, the (Walnut Creek, Calif.) Contra Costa Times reported. The bill now goes to the state Assembly for consideration, where it is likely to be amended to include taxes.
Over in Louisiana, the House passed a bill to create a prescription drug formulary for the state's workers' compensation system, the Insurance Journal reported. House Bill 592 has been now referred to the Senate Committee on Labor and Industrial Relations.
And in Illinois, some Republican leaders and state business groups criticized two recently passed measures aimed at overhauling the state's workers' compensation system, characterizing them as fake reforms, the Illinois News Network reported. This could result in Illinois Gov. Bruce Rauner vetoing the measures, The Insurance Insider reported.
Minnesota-based health insurance startup Bright Health raised $160 million in a Series B funding round to support its growth into new markets and expand its Medicare Advantage business.
Republican senators tasked with developing a bill to repeal and replace the ACA are weighing levying taxes on employer-sponsored health insurance plans that could bring billions in revenue to the federal government, The Wall Street Journal reported. Several lawmakers are open to the idea, including Sen. Mike Lee, R-Utah, but there is no consensus yet on including it in the Senate draft bill, according to the report.
Elsewhere, Sen. Richard Burr, R-N.C., told WXII 12 News that it is unlikely that the Senate will be able to reach an ACA replacement deal in 2017, The Wall Street Journal reported. Burr's comment is in sharp contrast to Sen. John Cornyn, R-Texas' statement on "The Chad Hasty Show" that the Senate will replace the ACA by the end of July.
All major commercial insurance lines saw premium renewal rate increases in May, according to a report from IVANS, a division of Applied Systems. The May IVANS Index, the industry's premium renewal rate index, indicated that the workers' compensation business line saw an increase in its premium renewal rate for the first time in 2017 in May, while other lines have been reporting increases in previous months.
Reinsurance rates fell for the sixth consecutive year at the June 1 renewal amid excess capacity and strong competition among traditional and insurance-linked securities markets, according to JLT Re.
Fidelity National Financial Inc. plans to hold loss provision around 5% of premium for the time being, but it will monitor its loss ratios closely moving forward, Executive Vice President and CFO Anthony Park said.
The catastrophe bond and insurance-linked securities market reached a record high of $8.15 billion as of June 1, Artemis reported. The outstanding market size has also reached a record high of more than $29 billion.
The U.S. Department of Labor is holding meetings with industry players over the Conflict of Interest Rule ahead of what could be a new rulemaking process. Officials including Acting Solicitor of Labor Nicholas Geale hosted a closed-door meeting May 30 on the so-called fiduciary rule after a broad range of financial services industry stakeholders requested time to share their views.
Shares of AmTrust Financial Services Inc. rallied following a 9% drop the same week the company completed a private placement of common stock to shore up its balance sheet. For the week ended June 1, the SNL Insurance Index rose 1.23% to 924.38, while the S&P 500 was up 0.59% to 2,430.06.
Reinsurers and other sources of private capital may exercise caution if a reauthorization of the National Flood Insurance Program asks more private capital to become involved in the flood insurance market, according to an S&P Global Ratings report.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.
And, NJM Insurance Group promoted Alastair Shore to senior vice president and CFO, and Tracy McManimon to senior vice president and chief underwriting officer.
EU suggests pharma guideline post-Brexit; drugmakers fail surprise inspections: Europe's pharma regulator suggested guidelines on medicinal products in relation to the U.K.'s decision to leave the EU; and almost 80% of drugmakers failed surprise inspections, according to the China Food and Drug Administration.
Financial news in other parts of the world
Asia-Pacific: Nomura involved in controversial bond buy; Deutsche eyes Asian wealth expansion
Europe: EU approves MPS rescue; CaixaBank makes CoCo debut; Unicaja to launch IPO
Middle East & Africa: Barclays Africa share placing upsized; Egypt ratifies investment law
The day ahead
Early morning futures indicators pointed to a higher opening for the U.S. market.
In Asia, the Hang Seng increased 0.44% to 25,924.05, and the Nikkei 225 climbed 1.60% to 20,177.28.
In Europe, around midday, the FTSE 100 was up 0.34% to 7,569.70, and the Euronext 100 was up 0.86% to 1,035.45.
On the macro front
The employment situation report, the international trade report and the Baker-Hughes Rig Count report are due out today.