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Egan-Jones sides with AmTrust; WellCare in $2.5B deal; Berkshire top 3 reinsurer

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Egan-Jones sides with AmTrust; WellCare in $2.5B deal; Berkshire top 3 reinsurer

Proxy adviser Egan-Jones joined Glass Lewis in recommending that AmTrust Financial Services Inc. shareholders vote in favor of the company's go-private deal. Institutional Shareholder Services has advised against the transaction.

WellCare Health Plans Inc. agreed to acquire Meridian Health Plan of Michigan Inc., Meridian Health Plan of Illinois Inc. and pharmacy benefit manager MeridianRx for $2.5 billion in cash. WellCare CEO Kenneth Burdick said the deal gives the company optionality should a path to profitable growth begin to emerge in the healthcare exchange business.

Further afield, Cigna Corp. will acquire Australia & New Zealand Banking Group Ltd. unit ANZ Bank New Zealand Ltd.'s OnePath Life (NZ) Ltd. life insurance business for NZ$700 million (US$484.1 million). The sale, which is subject to regulatory approval, is expected to be completed in fiscal 2019.

And in South Korea, Samsung Life Insurance Co. Ltd. and Samsung Fire & Marine Insurance Co. Ltd. will sell a 0.45% stake in Samsung Electronics Co. Ltd. for about US$1.1 billion, amid pressure on Samsung Group to simplify the cross-shareholding links among its affiliate companies.

In the U.K., an 18.2% stake in recently listed motor insurer Sabre Insurance Group PLC was sold by private equity funds advised by BC Partners LLP and company co-founder Angus Ball, for gross proceeds of $112.8 million. BC Partners will have a 14.5% stake in the company after the sale.

Also in the U.K., Phoenix Group Holdings launched a £950 million rights issue to help fund its acquisition of the insurance business of Standard Life Aberdeen PLC.

U.S. Sen Bill Cassidy, R-La., released a white paper containing new ideas to improve the healthcare system. It calls for allowing states to determine when an insurer is banned from re-entering the state's individual market and combining the individual market and Medicaid expansion pools and money. It also calls for incentivizing states that encourage young people to enter the individual market.

China's banking and insurance regulator proposed tweaking rules to allow a foreign insurance company to own 51%, up from 50%, of a Chinese life insurance joint venture.

The U.S. life and annuity industry's net income in the first quarter declined 54.6% from the same period a year ago to $3.5 billion from $7.6 billion, mainly due to a drop in pretax net operating income coupled with higher net realized capital losses, according to A.M. Best.

Property insurers, meanwhile, could face an insured loss bill of close to $50 million from former subtropical storm Alberto, according to estimates by catastrophe modeling company Karen Clark & Co. Residential, commercial and industrial properties are likely to be affected, as well as automobiles. The storm, now a depression, is expected to move north into the lower peninsula of Michigan today and tomorrow, with two to four inches of rain, and isolated higher amounts, possible from western Kentucky northward near the Illinois/Indiana border into the lower peninsula of Michigan, according to a 4 a.m. CT advisory from the National Hurricane Center.

And in reinsurance, Berkshire Hathaway Inc. became the world's third-largest reinsurer in 2017 thanks to the $10.2 billion premium it collected for reinsuring $20 billion of American International Group Inc.'s old long-tail liabilities, according to S&P Global Market Intelligence data. But the Warren Buffett-led company's stay in the top three could be short-lived.

Featured news

Novo Nordisk diabetes drug beats Lilly's; Bayer/Monsanto deal gets US DOJ nod: Novo Nordisk said its semaglutide tablet was better than Lilly's Jardiance in adults with type 2 diabetes in a phase 3 study, and Bayer said the U.S. Department of Justice granted conditional approval to its acquisition of Monsanto.

Financial news in parts of the world

Asia-Pacific: Ant Financial closes US$10B fundraising; China's Huifu to launch HK IPO in June

Europe: Italy crisis knocks bank shares; Deutsche Börse buys FX trading platform

Middle East & Africa: More Middle Eastern firms explore M&A; African states to discuss Chinese yuan

The day ahead

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

In Asia, Hang Seng lost 1.40% to 30,056.79, while the Nikkei 225 fell 1.52% to 22,018.52.

In Europe, around midday, the FTSE 100 rose 0.26% to 7,652.56, and the Euronext 100 gained 0.07% to 1,053.60.

On the macro front

Reports due out today are MBA mortgage applications, ADP employment, retail inventories, wholesale inventories, international trade in goods, Redbook and Beige Book.

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