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Fort McMurray wildfire in Canada set to be costly for insurers

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Fintech

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Fort McMurray wildfire in Canada set to be costly for insurers

Inthe news

It is too early to determine the economic or insuredlosses from the ragingwildfire in the Canadian city of Fort McMurray, which led to the evacuationof nearly 88,000, but the event is expected to become one of the costliestnatural disasters in the country's history, Aon Benfield said in a report.

Insuredlosses from the wildfire could surpass the C$700 million paid out for a2011 wildfire in Slave Lake, Reuters reported, citing analysts and industrysources. DBRS analyst Stewart McIlwraith said the cost of the event couldexceed C$2 billion. The Fort McMurray wildfire has destroyed 1,600 buildings,with 19,000 more under threat, compared with the 374 homes destroyed and 52homes damaged in the Slave Lake wildfire. The Insurance Bureau of Canada saidit is too early to estimate claim costs. Toronto-Dominion Bank, and have exposuresto the region.


The U.S. Department of Health and Human Services deniedmedia reports that proposed health insurance rate in Oregon would hurt consumers,the Portland Business Journalreported. HHS Press Secretary Jonathan Gold said tax credits would protect 71%of the Oregon consumers from the impact of the hikes.

A number of insurers are requesting rate hikes forindividual plans for 2017 after seeing higher-than-anticipated costs fromhealth insurance exchange enrollees in 2016, The Wall Street Journal reported.Withdrawing fromcertain markets is also an option for some insurers like and


The New York State of Health and the New York StateAthletic Commission partneredto enroll uninsured boxers in a health insurance plan through the state'smarketplace at weigh ins.

In Colorado, the House State, Veterans and MilitaryAffairs Committee threwout a bill that would have allowed voters to have a say on whether insurersoffering plans on the Connect for Health Colorado will have to continue payinga fee for the exchange's funding.


With Bill Baer at the helm of the Justice Department'santitrust division, AetnaInc.'s pending deal for Humana and 's pending acquisition ofCigna Corp. may nothave smooth sailing, Bloomberg News noted.


AmbacFinancial Group Inc. urged stockholders to vote for its board nominees asCanyon Capital AdvisorsLLC campaigns to replace Chairman Jeffrey Stein.

In related news, Cornwall Capital Management LP Canyon Capital Advisors shouldend its proxy campaign against Ambac Financial.


The U.S. property and casualty industry to produce historicallyfavorable results in the homeowners multiperil line during 2015, but as istypical in a business prone to catastrophes, geography served as a key factorin determining the loss ratios achieved by individual companies.


In deal news, Unity Health Plans Insurance Corp. and closedtheir merger.

Confie acquired the assets of Auto Insurance Specialists Inc.of Las Vegas, Trinity Insurance LLC and Whitehead Insurance Inc.

HilbGroup LLC is acquiring two employee benefits businesses, theindependent practice of Bill Grossman in Providence, R.I., and Group InsuranceConcepts in San Antonio.


ManulifeFinancial Corp., Essent Group Ltd. and Triple-S Management Corp. their .

Great-West Lifeco Inc., Industrial Alliance Insurance and Financial ServicesInc., Third PointReinsurance Ltd., Kemper Corp., Navigators Group Inc., Alleghany Corp., Trupanion Inc. and Infinity Property and Casualty Corp. are also expectedto report earnings today.

Click here to view S&P Global Market Intelligence'ssnapshot of financial results reported May 4 by insurance companies.

Inother parts of the world

AllianzGroup CEO Oliver Bäte, speaking at the insurer's annual meetingyesterday, attributed the company's 6.4% decline in first-quarter sales onchanges made to its life insurance operations, Reuters reported.Bäte said the group has completely refocused its life insurance business andthat the changes would produce "positive effects." Facingdifficulties in the current low interest rate environment, Allianz is lookingto sell fewer policies with guaranteed returns and is instead focusing on moreflexible products for which it has to reserve less capital.

The combined net profit of China's four major listedinsurers — China Life InsuranceCo. Ltd., Ping AnInsurance (Group) Co. of China Ltd., China Pacific Insurance(Group) Co. Ltd. and ChinaPacific Insurance (Group) Co. Ltd. — dropped 26.05% year over yearto 30.14 billion yuan in the first quarter, the National Business Daily reported. Thefour insurers' investment returns dropped 31.31% during the period.

The day ahead

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

In Asia, the Hang Seng fell 0.37% to 20,449.82, while theNikkei 225 was down 3.11% to 16,147.38. In Europe, as of midday, the FTSE 100was up 0.07% to 6,116.36, and the Euronext 100 rose 0.39% to 853.08.

On the macro front

The jobless claims report, the EIA natural gas report, theFed balance sheet and the money supply report are due out today.