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Aegon to reinsure US life block; activist investor opposes Humana/Kindred deal


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Aegon to reinsure US life block; activist investor opposes Humana/Kindred deal

Aegon NV has agreed to divest a block of life reinsurance business to SCOR SE. Under the terms, Aegon's Transamerica life subsidiaries will reinsure roughly $750 million of liabilities to SCOR. The deal covers roughly half of the life reinsurance business that Transamerica retained after a 2011 stake sale to SCOR. The deal may have a one-time benefit of roughly $75 million on Transamerica's capital position. It is expected to result in a pretax IFRS loss of roughly $125 million. Further, Aegon will dissolve a related captive insurance company to finance redundant reserves and will redeem $475 million of operational leverage.

Activist investor Brigade Capital Management opposed the $4.1 billion deal by Humana Inc. and two private equity firms to buy Kindred Healthcare Inc., calling the deal value "disappointing and grossly inadequate."

Global Indemnity Ltd. on Dec. 29 will acquire 3,397,031 of its A ordinary shares for roughly $83 million in the aggregate, or about $24.44 per share, from former investors in vehicles managed by Fox Paine & Co. LLC.

New York Gov. Andrew Cuomo has proposed new consumer protections for life insurance sales, which would adopt a "best interest" standard for licensed sellers of life insurance and annuity products. The proposed Department of Financial Services regulation, which is aligned with the recently delayed Conflict of Interest Rule, would require brokers to sell the product that best reflects the customer's interest rather than what is most profitable to the seller.

Nearly 40% of the 50 respondents who responded to The Wall Street Journal survey said they did not post comments on the Conflict of Interest Rule that were attributed to them on the Department of Labor's website. The fake comments were listed under their name, address, phone number and email, the report said. The department is collecting feedback about the rule that will not be fully implemented until July 2019.

Arkansas Insurance Commissioner Allen Kerr has authorized Columbus, Ohio-based insurance technology company Root Insurance Co. to sell private-passenger auto insurance products in the state. The insurtech company uses telematics data provided by consumers through its smartphone application to price insurance coverage.

Hannover Re issued a $10 million private catastrophe bond LI Re series 2017-1 through its segregated accounts vehicle Kaith Re Ltd., Artemis reported. The bond securitizes California earthquake reinsurance risk for an unknown cedent and some insurance-linked securities investors.

Morgan Stanley's analysts said rates may rise in the short term for the global reinsurance industry following the third-quarter catastrophe losses, but rate hikes in reinsurance and retrocession may not be sustainable in the long run, Artemis reported.

A trend of companies exiting the long-term care market and shifting consumer demand away from traditional LTC insurance has insurers looking for different ways to offer the policies to individuals.

S&P Global Market Intelligence presents a list of the year's most important players, including a state regulator who kept Affordable Care Act markets in her state open and a CEO tasked with reinvigorating a giant P&C insurer, with a look ahead to what could come next for them or their institutions.

Featured news

Teva's generic HIV medicine enters US market; Drug price hikes shrink: Republicans are under pressure to steady the country's healthcare system after President Donald Trump signed the tax cut bill which removed a requirement for every American to have health insurance or else pay a fine, also known as the individual mandate, under the Affordable Care Act, the Financial Times writes.

Financial news in other parts of the world

Asia-Pacific: Nippon Life acquires asset manager stake; India's National Insurance defers IPO

Europe: Barclays tax hit; Goldman denies Dublin rumor; German insurers' €2B nat-cat cost

Middle East and Africa: Sasfin Holdings names finance chief; Israel Discount Bank reinstates dividends

Latin America: Cade recommends approval of Itaú-XP deal; Argentina passes tax reform

The day ahead

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

In Asia, the Hang Seng was up 0.90% to 29,863.71. The Nikkei 225 fell 0.56% to 22,783.98.

In Europe as of midday, the FTSE 100 was up 0.14% to 7,631.42, while the Euronext 100 was down 0.04% to 1,041.59.

On the macro front

The U.S. international trade in goods report, the jobless claims report, the EIA natural gas report, the EIA petroleum status report, the Fed balance sheet and the money supply report are due out today.