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Retro ripe for reinsurance rate hikes; Anthem ups share buybacks

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Retro ripe for reinsurance rate hikes; Anthem ups share buybacks

Fitch Ratings said its fundamental outlook on the reinsurance sector remains negative as recent catastrophe losses represent a large percentage of capital for some reinsurers, the rating agency said in a report. While Fitch expects reinsurance rates to increase in U.S. catastrophe exposed lines and in the retrocessional market, the magnitude of rate increases could well depend "on the insurance-linked securities market's appetite to invest more capital in reinsurance."

Meanwhile, Moody's has a stable outlook on global reinsurers despite heavy third-quarter losses, reflecting their strong capital positions. A Moody's survey of reinsurance buyers showed that global reinsurers are also "more optimistic" about pricing, since they expect rates to harden following significant third-quarter losses, and more recently the California wildfires.

For U.S. health insurers, Fitch revised its 2018 fundamental sector outlook to stable from negative anticipating this year's stronger-than-expected operating performance to continue in 2018.

CNA Financial Corp. bought a new quota share reinsurance cover to support growth of its financial institutions and management liability portfolio, The Insurance Insider reported. Under the quota share treaty, CNA will cede around 40% of a book of business with expected subject premiums of slightly below $100 million, according to the report.

Validus Holdings Ltd. expects the net impact from the October California wildfires to be $30.0 million.

In deal news, AssuredPartners Inc. acquired Sacramento, Calif.-based Owen-Dunn Insurance Services. Owen-Dunn provides an array of insurance services to businesses and individuals throughout California, including property/casualty, surety, worker's compensation, employee benefits, loss control and claims management.

United Insurance Holdings Corp. priced the offering of its 6.250% senior notes due 2027, which will be issued in an aggregate principal amount of $150 million.

Anthem Inc.'s board increased the company's share repurchase authorization by $5 billion, resulting in a current total amount available for buybacks of about $7.3 billion.

AXIS Capital Holdings Ltd.'s board increased the quarterly dividend by 3% to 39 cents per common share.

A group of managed care companies' shares fell during the same week several multibillion-dollar deals were announced in the insurance space. The SNL Insurance Index fell 1.06% to 1,039.35, while the S&P 500 slightly dropped 0.20% to 2,636.98 during the week ended Dec. 7.

Michael DeKoning, Munich Re's U.S. life business as president and CEO, is leaving the company in January 2018.

Featured news

Roche's cancer 'velcro;' Elliott pushes for change at Alexion: The U.K.'s National Institute for Health and Care Excellence, or NICE, recommended Eisai Co. Ltd.'s Kisplyx, in combination with Novartis AG's Afinitor, as an option for treating a type of kidney cancer in adults under certain conditions. The recommendation reverses a previous draft guidance by NICE, where the regulator did not recommend the combination.

Financial news in other parts of the world

Asia-Pacific: Indonesia moves to curb digital currencies; Nepal Rastra to cut bourse stake

Europe: KPN denies foreign acquisition plans; TIM receives offers for Persidera

Middle East & Africa: Bahrain eyes new rules for Islamic banks; Moza Banco cash call approved

Latin America: Honduras to hold partial re-count of votes; BTG Pactual raises $500M

The day ahead

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

In Asia, the Hang Seng increased 1.19% to 28,639.85, and the Nikkei 225 increased 1.39% to 22,811.08.

In Europe, around midday, the FTSE 100 was up 0.31% to 7,343.59, and the Euronext 100 was up 0.45% to 1,046.90.

On the macro front

The employment situation report, the consumer sentiment report, the wholesale trade report and the Baker-Hughes Rig Count report are due out today.