Hurricane Harvey Hits Insurance Stocks
S&P Insurance Index plunged
US stocks rose higher last week as the market expects a further delay in monetary policy tightening following a weaker-than-expected jobs report. The United States added 156,000 jobs in August, which was much lower than expectations of 180,000 jobs. The broader S&P 500 Index (SPX-INDEX) rose 1.4%. However, the S&P Financial Sector Index (XLF) and the S&P Insurance Select Industry Index (SPSIINS) were in the red, falling 0.10% and 1.4%, respectively.
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Hurricane Harvey hurt the shares of US property and casualty insurers. JPMorgan (JPM) estimated insured losses of around $20.0 billion. Stocks for Travelers Companies (TRV) and Allstate (ALL), two of the largest homeowner insurers in Texas, fell 5.2% and 2.4%, respectively. Progressive (PGR), a large auto insurer in Texas, fell 5.7%.
Wells Fargo’s fake account scandal is much bigger
Wells Fargo (WFC), a diversified financial services company with $1.9 trillion in assets, has revealed that the number of unauthorized customer accounts opened by its employees is 3.5 million, which is 67.0% higher than the 2.1 million disclosed by the bank in September 2016. Reopening the agreement between Wells Fargo (WFC) and regulatory authorities could lead to additional fines and penalties for the bank. The bank paid $185.0 million to regulators in September 2016 and recently agreed to pay $142.0 million more to customers to settle a class action lawsuit.