Mon, Sep. 26, 3:13 PM
- In what doesn't sound like great news for the already-yield-starved insurance industry, cash balances are "ticking upward," says Zach Buchwald, head of BlackRock's insurance asset-management operation.
- Buchwald: “In today’s environment, where every basis point is so precious, within your core fixed income, we want to be investing wisely and generating the best risk-adjusted returns we can, and a large cash balance doesn’t help.”
- Nearly half of 315 insurers surveyed globally expect to boost cash holdings in coming months - that's up from 36% a year ago, says BlackRock. At issue are poor performance in alternative investments and credit concerns following a sizable narrowing in spreads this year.
- Struggling insurers are past the point of expecting rising interest rates, says Buchwald. So - other than cash - where else will the money go? Allocations to private-equity appear to be set to rise, and outfits like AIG are turning to direct lending. At MetLife (NYSE:MET), commercial real estate loans hit a record last year.
- Other interested parties: PRU, LNC, MFC, SLF, PRI, VOYA
Wed, Aug. 3, 10:25 AM
- Q2 operating earnings of $0.79 per share were up one penny from a year ago.
- Retirement operating earnings of $141M up 10% Y/Y; annuities of $73M up 20%; individual life of $50M up 32%; investment management of $32M down 32%; employee benefits of $32M down 16%.
- Retirement net inflows of $693M vs. $475M a year ago; AUM of $115B up from $113B. Annuities net outflows of $45M; AUM of $27.3B vs. $26.9B a year ago.
- $267M of buybacks during quarter. Book value per share (excl. AOCI) of $59.44. Excess capital of $775M at quarter's end.
- Previously: Voya Financial EPS in-line, beats on revenue (Aug. 3)
- VOYA +8.3%
Wed, Aug. 3, 6:01 AM
Tue, Aug. 2, 5:30 PM
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Thu, Jul. 28, 5:34 PM
Fri, Jun. 24, 11:58 AM
- The Too Big To Fail lenders are naturally among the day's big losers following the U.K. vote to leave the EU, but losses in the financial sector are wide and deep as - among other things - interest rates look to be a lot lower for a lot longer.
- Among asset managers, Invesco (IVZ -10.8%) - with a sizable U.K. exposure - is faring about the worst. WisdomTree (WETF -7.8%) takes a hit as the yen is the solo currency surging against the dollar, reducing demand for its popular hedged Japan ETF.
- It's wait till next year (or even 2018 if you believe short-term rate futures markets) for rate hikes, meaning regional lenders can't celebrate their passing of the Fed stress tests last night. Regions (RF -7.8%), KeyCorp (KEY -6.4%), PNC Financial (PNC -5.5%), U.S. Bancorp (USB -4.2%), BB&T (BBT -5.1%).
- Even lower rates put even more pressure on the business models of the life insurers: MetLife (MET -8.8%), Prudential (PRU -7.7%), Lincoln National (LNC -9.9%), Voya (VOYA -7%). Online brokers too: E*Trade (ETFC -9.4%), Schwab (SCHW -9.5%).
- ETFs: KRE, KBE, IAT, KBWB, QABA, KBWR, KRU, KRS, WDRW, DPST
Wed, May 4, 10:11 AM
- The company missed estimates by a mile thanks to alternative investment income - think hedge funds and private equity - that was $56M less than management expectations.
- Q1's volatility is old news, says BTIG's Mark Palmer, and - checking operations - he's not finding anything else of concern in the report. The individual life unit - the cause of a couple of recent earnings misses - posted a $6M Y/Y improvement in adjusted operating earnings to $49M.
- A sizable part of the Voya (VOYA -3.3%) bull case is capital returns, says Palmer, and the insurer took advantage of market weakness to buy back $220M in stock in Q1, leaving about $500M in its authorization.
- He retains his Buy rating and $50 price target (66% upside).
Wed, May 4, 6:01 AM
Tue, May 3, 5:30 PM
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Wed, Apr. 27, 4:55 PM
Wed, Feb. 24, 11:44 AM
Thu, Feb. 11, 12:51 PM
- At the moment it's yet again looking like "wait till next year," for the sustained rise in interest rates the life insurers need to be able to earn some real money.
- Last night it was Prudential Financial (PRU -10.1%) joining MetLife (MET -4.7%) and Lincoln Financial (LNC -9.2%) in reporting a disappointing Q4, with investment results contributing $105M less this year that they did in Q4 of 2014.
- While still upbeat on the economic outlook, Janet Yellen is spending an uncomfortable amount of time in her Congressional testimony talking about negative interest rates, and a chart of Google searches for "negative interest rates" is through the roof.
- Manulife (MFC -10.3%), Sun Life (SLF -3%), Primerica (PRI -3.7%), Voya Financial (VOYA -4.6%)
- The 10-year Treasury yield is lower by 10 basis points to 1.6%, and short-term rate futures have begun pricing in a rate cut by the Fed.
Wed, Feb. 10, 9:41 AM
- With the stock trading at just 0.47x book value (ex. AOCI), any buybacks done under the new $700M plan will be highly accretive, says BTIG's Mark Palmer, reiterating his Buy rating and $50 price target.
- The fast pace of repurchases, says Palmer, is a key leg to the Voya (VOYA +1.3%) bull story - highlighting the consistent generation of excess capital and the company's willingness to return that money to owners.
- Voya has been hit particularly hard in the market selloff due to its perceived interest-rate sensitivity, but, says Palmer, the actual impact of lower rates is more than reflected in the stock price.
- Previously: Voya Financial boosts buyback by $700M (Feb. 10)
Wed, Feb. 10, 7:57 AM
- Q4 operating earnings of $196M or $0.91 per share vs. $245M and $0.99 one year ago. Excluding items, operating earnings this year of $0.82 per share beat estimates by $0.03.
- Retirement operating earnings of $137M down 9% Y/Y; Annuities of $63M down 3%; Individual life of $103M flat; Investment management of $42M down 11%. Employee benefits of $24M down 58%.
- Employee benefits loss ratio for Group Life was 78.7% vs. 72.2% a year ago. Loss ratio for Stop Loss of 75.9% vs. 61.9%. The expected annual loss ratio for both is in the 75-80% range.
- 6.26M shares bought back during quarter at average price of $39.97 each. 34.3M shares repurchased during 2015 at average price of $43.39 each. Company lifts authorization by $700M today. Book value per share (excl. AOCI) of $57.44.
- Previously: Voya Financial beats by $0.12, beats on revenue (Feb. 10)
- VOYA flat premarket
Wed, Feb. 10, 6:05 AM
- Voya Financial (NYSE:VOYA): Q4 EPS of $0.91 beats by $0.12.
- Ongoing busines operating earnings of $369M (-12.6% Y/Y) beats by $58.3M.
Tue, Feb. 9, 5:30 PM