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Storm surge could cost $1.6T; Aflac dips on SEC probe report; L&G sells in India

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Storm surge could cost $1.6T; Aflac dips on SEC probe report; L&G sells in India

Consultancy EY said hurricanes, wildfires and other catastrophes made 2017 the costliest year on record for the U.K. specialty insurance market. Claims paid from these disasters rose 9.4% year over year to £4.5 billion, with syndicates reporting a £2 billion loss, compared to a £2.1 billion profit a year earlier. Reuters has a report.

Across the Atlantic, Florida, Louisiana and Texas are the top three states for potential losses from hurricane-related storm surges, according to CoreLogic. In a worst-case scenario, nearly 7 million homes could be at risk, at an estimated rebuilding cost of $1.62 trillion. Not surprisingly, Florida has the most homes at risk, some 2.7 million, followed by Louisiana with over 817,000 at-risk homes, Texas with more than 543,000 and New Jersey with over 471,000.

As the Atlantic hurricane season officially begins today, Fitch Ratings has said U.S. property and casualty insurers are "well-positioned" for what looks set to be an average season. The agency noted that reinsurers have seen some rate increase, but that these have been short of many market participants' expectations.

Beyond hurricanes, emerging geopolitical risks, a re-emergence of asbestos, cyber threats and the erosion of risk diversification are some of the key problems facing the insurance and reinsurance industry, according to Swiss Re.

Zurich Insurance Group AG and Storebrand ASA both have limited exposure to Italian government bonds, their CEOs told Bloomberg TV.

Zurich Insurance CEO Mario Greco also told the news outlet that M&A is not a priority for his company "We are in the middle of a fundamental industry transformation where consolidation doesn't solve the issues, doesn't make it easier for any of us to confront the issues of the transformation," he said. "We are doing some targeted, focused M&A transactions and we will continue doing that."

A number of transactions were completed, including Assurant Inc.'s $2.5 billion acquisition of Warranty Group Inc. from TPG Capital Management LP; The Hartford Financial Services Group Inc.'s $2.05 billion sale of runoff life and annuity business Talcott Resolution Inc.; Aviva PLC's €225 million purchase of Ireland-based Friends First Life Assurance Co. Ltd. from Dutch insurer Achmea BV; and Nippon Life Insurance Co.'s $955 million acquisition of an 85.1% stake in MassMutual Japan from Massachusetts Mutual Life Insurance Co. unit MassMutual International LLC;

Legal & General Group PLC agreed in principle to sell its stake in IndiaFirst Life Insurance Co. Ltd. to an affiliate of U.S.-based private equity firm Warburg Pincus LLC for 7.11 billion Indian rupees, or roughly £79 million.

And in Australia, health insurers HBF Health Funds Inc. and The Hospitals Contribution Fund of Australia Ltd., or HCF, have scrapped their merger plans.

Aflac Inc. shares fell more than 1% yesterday after Bloomberg News reported that the U.S. Securities and Exchange Commission is reviewing a complaint accusing the company of income smoothing and other irregularities.

AXIS Re, the reinsurance segment of AXIS Capital Holdings Ltd., has been divided into four geographic divisions: North America; Europe, the Middle East and Africa; Asia; and global markets.

In another restructuring, London-listed Lloyd's of London insurer Beazley PLC will split its $1.29 billion gross written premium specialty business into specialty and technology, media and business services divisions.

And The Insurance Insider reported that the Corporation of Lloyd's, which oversees the Lloyd's market, will shift its Hong Kong, Greater China and Asia Pacific operations into a combined One Asia brand.

Featured news

9 drugs recommended for EU approval; right-to-try bypasses US FDA, says author: The European Medicines Agency's Committee for Medicinal Products for Human Use recommended nine medicines for approval at its meeting in May; and the author of the Right To Try Act said the law was meant to loosen U.S. regulators' authority.

Financial news in other parts of the world

Asia-Pacific: Hong Kong fines Hang Seng Bank unit; Nippon Life buys stake in MassMutual Japan

Europe: S&P downgrades Deutsche; Political worries shift to Spain from Italy

Middle East & Africa: UAE's Abraaj faces wind-up petition; Kenya to probe banks over stolen funds

The day ahead

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

In Asia, the Hang Seng increased 0.08% to 30,492.91, while the Nikkei 225 decreased 0.14% to 22,171.35.

In Europe, around midday, the FTSE 100 was up 0.71% to 7,732.26, and the Euronext 100 was up 1.14% to 1,060.98.

On the macro front

The motor vehicles sales report, the employment situation report, the PMI Manufacturing Index, the ISM Manufacturing Index, the construction spending report and the Baker-Hughes Rig Count report are due out today.

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