Aetna-Humana deal would breach Missouri laws
The proposed merger of Aetna and Humana would breach anti-competitiveness rules in Missouri. The state’s Department of Insurance has become the first state regulator to publish its findings.
If the deal were to go ahead, the two insurers would be forced to stop selling certain products including some Medicare Advantage plans, individual insurance and small group policies due to a combined market share above 50 per cent.
Fifteen of the 20 states where Humana operates have approved applications from Aetna for the tie-up. California is the largest of the states to yet decide whether the deal would be acceptable.
The US Department of Justice and other regulators are currently investigating the implications of allowing the mega-merger and it is not expected that the Missouri findings alone would affect that decision.
Large insurers finding it harder than smaller rivals
The largest insurance companies are finding it harder to compete amid growing pressure from shareholders for short-term profits. Bloomberg Intelligence says that firms like Prudential Financial and
MetLife are facing increased competition from mutuals in the life insurance space.
The insurers that have to deliver for shareholders are having to gain larger profits from their policies compared to their mutual rivals. Bloomberg says that the share of mutuals in North America is now at 31.5 per cent and growing by 6.6 per cent annually.
One conclusion of the report is that the large publicly-quoted companies may be making decisions that deliver profits in the short-term for shareholders but which may not be the best for long-term goals.
Allstate launches new home-share coverage
As the popularity of Airbnb and its peers continues to grow, Allstate Insurance has launched a new product for homeowners. HostAdvantage is being trialled in 5 states - Arizona, Colorado, Illinois, Michigan, Tennessee and Utah – and can be added to existing policies to provide coverage that existing policies do not.
For around $50 a year homeowners’ personal property including furniture and electronics will be covered against damage by short-term renters of their homes. Although Airbnb does include free host insurance, owners may decide that they would prefer to ensure their own added protection.
