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Prudential deal price tag; AIG's cyber shift; Dorian lashes NC; August cat recap

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Prudential deal price tag; AIG's cyber shift; Dorian lashes NC; August cat recap

Although analysts acknowledge the steep price tag attached to Prudential Financial Inc.'s planned acquisition of insurtech startup Assurance IQ Inc. for roughly $2.35 billion, several still view the transaction as a "wise use" of the company's cash. Also, Prudential Chairman and CEO Charles Lowrey said the companies would look at both developed and emerging markets, but did not give a time frame for looking at international growth.

American International Group Inc. will either affirmatively cover or exclude cyber exposures in "virtually all" of its commercial property and casualty insurance policies, starting in January 2020. This involves physical and non-physical cyber exposures and involves policies from property to general liability.

The costliest cyber catastrophe scenario is widespread data loss from a leading operating system provider that could cause a $23.8 billion loss, according to a study from Guy Carpenter and CyberCube Analytics. Large-scale data loss from a cloud service provider could lead to a $22.2 billion loss, while widespread theft from a major e-mail service provider could trigger a $19.1 billion loss.

The eye of Hurricane Dorian was passing just east of Cape Lookout, N.C., the National Hurricane Center said in its 5 a.m. EDT bulletin. Hurricane-force winds are being felt in the southern outer banks of North Carolina. A hurricane warning is in effect for Little River Inlet to the North Carolina/Virginia border, as well as Pamlico and Albemarle Sounds. Dorian has maximum sustained winds near 90 mph with higher gusts.

The total insured and uninsured losses from Hurricane Dorian in the Bahamas will be $7 billion, catastrophe modeling company Karen Clark & Co. estimated. KCC said estimated losses totaled $4 billion on Abaco Island and $2 billion on Grand Bahama.

Insurers face more than $2.0 billion of payouts from U.S. and European severe convective storms, according to Aon PLC's catastrophe report for August. Total economic losses in China from typhoon Lekima were estimated to approach 72 billion Chinese yuan.

About $5.4 billion of catastrophe bond issuance was secured in the 12-month period ending June 30, according to a new report from Aon Securities. Insurance-linked securities capital in place has contracted to $93 billion from $98 billion. By June 30, catastrophe bonds on-risk had reached $30 billion, close to flat from June 30, 2018, owing to the light maturity year in the market.

The Financial Accounting Standards Board is proposing a temporary guidance to ease the transition of companies from the London Interbank Offered Rate and other interbank offered rates. The accounting standards update aims to provide optional measures for applying GAAP to contract modifications and hedging relationships that use Libor or another reference rate that is expected to be discontinued.

Proxy advisory firm Glass Lewis & Co. recommended that EMC Insurance Group Inc. shareholders approve Employers Mutual Casualty Co.'s proposed acquisition of all of the insurer's shares that it does not already own.

Marsh and Construction Risk Partners LLC entered into an agreement whereby the latter's management will buy back the company's stock from JLT Specialty USA, a unit of Jardine Lloyd Thompson Group Ltd.

Star Insurance Holdings LLC will now acquire Syncora Guarantee Inc. for an increased cash purchase price of $429 million, versus the previous price of $392.5 million, as part of an amended agreement.

Hodgen Mainda was named commissioner of the Tennessee Department of Commerce & Insurance, joining Gov. Bill Lee's cabinet. Mainda will start his new role Oct. 1.

The Financial Services Regulatory Authority of Ontario approved the use of electronic proof of auto insurance, or EPAI, for drivers in the province. Minister of Finance Rod Phillips said the electronic insurance card will have "sophisticated safeguards" that will prevent them from being edited or altered and will prevent anyone to track the policyholders' location or disclose their data without explicit permission, Canadian Underwriter reported.

The Financial Supervisory Authority of Norway is allowing Fremtind Forsikring AS to offer life insurance through subsidiary Fremtind Livsforsikring AS.

A potential sale is one of the options that Axa SA and Kuala Lumpur-based Affin Bank Bhd. are considering for their life and general insurance business in Malaysia, Bloomberg News reported. People with knowledge of the matter said off-loading the business could fetch around US$650 million.

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Dorian's approach a reminder of 'major issues' in NC property insurance market: The industry has sought to address what it believes to be inadequate pricing for coastal North Carolina property business with double-digit rate increases for the affected lines. But those efforts have encountered regulatory delays and resistance.

Liberty Mutual hikes private auto rates; GEICO cuts in July: Also, five subsidiaries of American Family Insurance Group received nine rate-increase approvals during the month. They could potentially boost group's written premium by $33.0 million.

In other parts of the world

Asia-Pacific: Axa mulls sale of Malaysian JVs; China opens interbank FX market to 3 brokerages

Europe: Brexit saga continues; Novo Banco could face €106M loss; Sweden holds rate

Middle East & Africa: FirstRand posts results; Sanlam targets Egypt; Ghana sees room for policy easing

The day ahead

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

In Asia, the Hang Seng rose 0.66% to 26,690.76, and the Nikkei 225 rose 0.54% to 21,199.57.

In Europe, around midday, the FTSE 100 was down 0.8% to 7,265.62, and the Euronext 100 was down 0.18% to 1,080.49.

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 employment situation report, the quarterly services survey and the Baker-Hughes Rig Count report are due out today.

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