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$320B man-made disaster risk; more ACA rate hikes; Zurich prefers small M&A

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$320B man-made disaster risk; more ACA rate hikes; Zurich prefers small M&A

A number of managed care insurers in New York and Washington have asked regulators to approve double-digit rate increases for 2019 Affordable Care Act individual plans. Fidelis Care New York requested a 38.6% increase, while Kaiser Foundation Health Plan of Washington proposed a rate increase of 29.78%, but BridgeSpan Health Co. requested an increase of just 0.89%. The weighted average increase was 24% in New York and 19.08% in Washington.

In Pennsylvania, meanwhile, health insurers that sell plans in the state individual market have filed for an aggregate statewide increase of 4.9% in 2019, while those in the small group market asked for a 3% increase, the state Department of Insurance said.

Man-made risks such as cybercrime, conflict and financial market crashes are putting $320.1 billion of global GDP at risk each year across 279 major cities, eclipsing the $226.4 billion potential hit to economic output from natural catastrophes, Lloyd's of London has estimated. Tokyo and New York are seen as most at risk, while nearly $93 billion of North American GDP is on the line.

Premium renewal rates in the U.S. improved across most major standard commercial lines insurance products in May compared to April, including business owner's policy, general liability, commercial property and workers' compensation, according to a report from IVANS, a division of Applied Systems. Workers' comp remained the only business line with declining rates, although at a slightly reduced pace, while the rate of growth eased somewhat in commercial auto and umbrella.

Some insurers will pre-emptively boost capital buffers in the run-up to the introduction of new global accounting rules known as IFRS 17 in 2021, S&P Global Ratings predicted.

Zurich Insurance Group AG CFO George Quinn told CNBC that large-scale mergers and acquisitions rarely work out well for both parties, and that smaller, more country-focused deals have tended to be better for Zurich. The company has been linked to a potential tie-up with German giant Allianz Group.

Lloyd's of London has warned that it will shutter consistently loss-making syndicates if they do not post a profit, re-Insurance.com reported.

In China, the Main Board Issuance Approval Committee of the China Securities Regulatory Commission approved People's Insurance Co. (Group) of China Ltd.'s proposed secondary listing on the Shanghai Stock Exchange, although the company has not yet received the written approval from the regulator. PICC Group is plans to pursue the secondary listing to raise additional capital.

In Korea, MBK Partners Ltd. stalled its plan to sell its 59.19% stake in ING Life Insurance Korea Ltd. after another interested party pulled out of the US$2.3 billion deal, The Korea Times reported. KB Financial Group Inc. withdrew its bid because MBK Partners' asking price for ING Life's management rights is beyond the company's budget.

RSA Insurance Group PLCThe Reserve Bank of New Zealand pulled out of a liquidation hearing scheduled in the week of June 4 involving CBL Insurance Ltd., but it requested that the interim liquidation continue, Scoop reported. The hearing was supposed to consider whether to put CBL Corp. Ltd. unit CBL Insurance into liquidation following claims that it breached solvency margins and statutory directions. CBL's issues have had ripple effects across various global markets.

Featured news

US drops plan to cut Ebola funding; AbbVie drug succeeds trial: The White House dropped plans to cut $252 million in leftover funding appropriated to fight Ebola in 2015; and AbbVie's upadacitinib met the main goal of significantly reducing rheumatoid arthritis symptoms in a late stage study.

Financial news in other parts of the world

Asia-Pacific: PICC Group's Shanghai IPO gets nod; StanChart eyes Asian ops consolidation

Europe: BoE wants banks to draw resolution plans; US funds bid for Banco BPM loans

Middle East & Africa: Fitch lifts Qatar outlook; Mashreqbank seeks Saudi banking license

The day ahead

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

In Asia, the Hang Seng was up 0.53% to 31,259.10, while the Nikkei 225 rose 0.38% to 22,625.73.

In Europe, around midday, the FTSE 100 rose 0.37% to 7,716.06, and the Euronext 100 shed 0.14% to 1,061.64.

On the macro front

The bank reserve settlement report, the MBA mortgage applications report, the international trade report, the productivity and costs report, the EIA petroleum status report and Treasury STRIPS are due out today.

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