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ACA mandate unconstitutional; PG&E deal approved; BoE to test on climate change


Insurance Underwriting Transformed How Insurers Can Harness Probability of Default Models for Smarter Credit Decisions


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Essential IR Insights Newsletter Fall - 2023

ACA mandate unconstitutional; PG&E deal approved; BoE to test on climate change

The U.S. Court of Appeals for the 5th Circuit in New Orleans declared the Affordable Care Act's individual mandate unconstitutional but did not invalidate the law in its entirety. The appeals court returned the case to the lower district court in Texas to decide if other provisions in the 2010 healthcare law could survive without the individual mandate.

The U.S. homeowners insurance industry's loss ratio improved markedly year over year in the third quarter, declining to 59.19% from 66.77%, while premiums grew 5.4% over the same period. Among the top 20 homeowners insurers, the company that saw its loss ratio improve the most was American International Group Inc.

Embattled California utility Pacific Gas and Electric Co. claimed a pair of pivotal victories in its suddenly fast-moving bankruptcy restructuring process together with its parent company, PG&E Corp., when late Dec. 17, a federal judge approved major settlements with wildfire victims and insurance companies totaling $24.5 billion.

Swiss Re AG estimated global insured losses in 2019 to be about $56 billion, down from $93 billion in 2018 and below the previous 10-year annual average.

Banks and insurers in the U.K. will be stress-tested against the effects of different climate change scenarios in what the Bank of England claims will be pioneering tests. The central bank said both banks and insurers are exposed to climate-related risks and the actions of one sector will spill over to affect the other.

France is planning to implement measures that would ease the pressure on insurers' prudential ratios in the low interest rate scenario. The government will sign off a decree in the coming days allowing life insurers to take back part or all of the provision for profit sharing, which belongs to insured parties.

MetLife Inc. agreed to pay $10 million to settle charges that it violated federal securities laws related to "longstanding accounting errors" caused by insufficient internal controls. The company agreed to cease and desist from committing any future violations, but did not admit or deny the SEC's findings.

Yunfeng Financial International Holdings Ltd. agreed to acquire the entire issued share capital of YUVAN Ltd., a holding company whose sole significant asset is a 9.8% stake in YF Life Insurance International Ltd.

Aegon NV entered into a long-term longevity reinsurance agreement with Canada Life Reinsurance Ltd. covering risks associated with €12 billion of liabilities in the Netherlands.

Prudential Financial Inc. brought forward its run-rate margin expansion and implementation cost projections related to a number of programs. The updates include projected fourth-quarter implementation costs of about $360 million, but it now expects run-rate margin expansion of $250 million to $300 million by the end of 2020, up from the previous $100 million.

U.K.-based MS Amlin Ltd. will stop underwriting corporate property, casualty and package binders via its U.K. property and casualty business, effective Jan. 31, 2020.

Now featured on S&P Global Market Intelligence

EU regulator: Stress test shows pension funds have much more to do on ESG risks: EIOPA Chairman Gabriel Bernardino said pension funds need to tackle the exposure to carbon-intensive industries in their investments, but that it should be done gradually.

PE firms bullish on lift from insurance asset management strategies: Three leading alternative asset managers have distinct entry points and strategies for insurance company affiliations. But their growing presence in the sector shares common themes.

In other parts of the world

Asia-Pacific: HK bourse enhances ESG focus; Westpac served with shareholder litigation

Europe: UK to test banks for climate risks; potential Co-op sale; Nordea in €575M deal

Middle East & Africa: S&P cuts Lebanese banks; Dubai Islamic Bank shareholders OKs Noor Bank takeover

The day ahead

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

In Asia, the Hang Seng decreased by 0.30% to 27,800.49, while the Nikkei 225 was down 0.29% to 23,864.85.

In Europe, around midday, the FTSE 100 increased by 0.21% to 7,558.69, and the Euronext 100 increased by 0.01% to 1,140.42.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

On the macro front

The jobless claims report, the Philadelphia Fed business outlook survey report, the current account report, the existing homes sales report, the leading indicators report, EIA natural gas report, the Fed balance sheet and the money supply report are due out today.

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