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Excess capital may dampen property rate hikes; HHS head vows to uphold ACA

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Excess capital may dampen property rate hikes; HHS head vows to uphold ACA

While commercial property insurers are looking to secure double-digit rate hikes on cat-exposed insurance programs following a surge in natural catastrophe-related losses in 2017, the abundant capacity of traditional and alternative capital is "dampening the potential for widespread market firming," according to Willis Towers Watson. Loss-impacted properties are facing the steepest premium hikes of between 20% and 25%, while catastrophe-exposed programs that did not suffer losses are likely to see price increases of 10% to 20%, according to the report.

During a Feb. 14 House hearing over President Donald Trump's fiscal-year 2019 budget proposal, several Democratic members of Congress criticized Trump's proposed cuts to Medicaid; the administration's desire to end the expansion of the program under the Affordable Care Act; and the Centers for Medicare and Medicaid Services' change in policy to permit states to test imposing work requirements on beneficiaries. But Health and Human Services Secretary Alex Azar vowed to uphold the ACA's rules and would act against Idaho if it permits insurers to sell plans to consumers that fail to meet the 2010 law's requirements, so-called skimpy plans.

Aetna Inc. has disputed a recent CNN news report that called into question the insurer's practice of approving or denying claims. "The story was pushed by attorneys for an individual suing Aetna; in fact, it was conveniently published days before the trial was scheduled to begin," Aetna said on its website. Regarding the testimony of Dr. Jay Iinuma that was used by CNN, Aetna said that "medical records were in fact an integral part of the clinical review process during Iinuma's tenure at Aetna."

Elsewhere, corporate lawyers believe the recent development and the pending probe at Aetna is not likely to derail its planned deal with CVS Health Corp., The National Law Journal reported. An antitrust lawyer said despite the inquiries, state regulators would consider a number of other factors such as local competition and financial condition of the companies while reviewing if a deal is in the public interest.

Infinity Property & Casualty Corp. and Kemper Corp. disclosed a termination fee of $49.6 million related to their pending merger.

Berkshire Hathaway Inc. sold 6 million shares, or 1.31% of its investment in Wells Fargo & Co., one of its most noteworthy investments. Berkshire's action came following the Federal Reserve's unprecedented action against the bank in early February. Berkshire held 458,232,268 Wells Fargo shares worth $27.80 billion as of Dec. 31, 2017.

Baldwin & Lyons Inc. reported quarterly results. Industrial Alliance Insurance and Financial Services Inc., Echelon Financial Holdings Inc., NMI Holdings Inc., Navigators Group Inc. and Fairfax Financial Holdings Ltd. are also expected to report earnings today.

Featured news

J&J prostate cancer drug scores FDA nod; Buffett's investment lifts Teva stocks: Driven in part by wage growth and ever-increasing prescription drug prices, U.S. healthcare spending is expected to rise more rapidly over a decade than it did in the last eight years, according to projections by the Centers for Medicare and Medicaid Services' Office of the Actuary.

Financial news in other parts of the world

Asia-Pacific: India, China bidding for Bangladesh bourse stake; Suncorp H1 net profit slides

Europe: Aegon Q4 profit up 110%; Rabobank FY'17 profit jumps; Creval prices share issue

Middle East & Africa: Ramaphosa to lead South Africa as Zuma resigns; Tunisian central banker leaves

Latin America: Intercorp's profit tumbles in Q4'17; Banco Agibank mulls IPO

The day ahead

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

In Asia, the Hang Seng grew 1.97% to 31,115.43, and the Nikkei 225 was up 1.47% to 21,464.98.

In Europe, as of midday, the FTSE 100 was up 0.58% to 7,255.48, and the Euronext 100 had climbed 1.02% to 1,011.90.

On the macro front

The jobless claims report, the PPI-FD report, the Empire State Mfg Survey, the industrial production report, the National Association of Home Builders' housing market index, the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.