Feb. 12, 2014, 12:10 AM
Feb. 11, 2014, 5:35 PM
Jan. 29, 2014, 12:59 PM
- Strong equity markets in Q4 should propel earnings for life insurers (set to start this week), writes Credit Suisse's Tom Gallagher, particularly those with variable annuity and asset management/retirement exposure. MetLife (MET -0.6%), Prudential (PRU -0.5%), and Lincoln National (LNC -1.1%), of course, have been busily trying to reduce exposure to variable annuities after nearly being brought down by them in the financial crisis.
- Deutshce's Yaron Kinar also strikes a bullish note, welcoming the big declines so far this year as a buying opportunity.
- Hartford (HIG -0.6%) is expected to post EPS of $0.90 vs. $0.54 a year earlier, and guidance should "be supportive" of his 2014 estimate of $3.62, says Gallagher, who rates the stock at Outperform.
- Principal Financial (PFG -0.9%) is expected to report $0.93 vs. $0.82 a year ago. Kinar expects a slowdown in buybacks to $23M. He rates the shares a Hold.
- Aflac (AFL +0.5%) is expected to post $1.39, down from $1.48 a year ago. Gallagher's numbers are higher, but he rates the shares only at Neutral.
- Capital returns at Ameriprise (AMP -0.6%) are estimated at $475M in Q4 - $375M in buybacks and $100M dividend - says Gallagher, rating the stock at Neutral.
- Prudential (PRU -0.5%) - rated at Outperform by Gallagher - should report $2.33 vs. $1.69 a year ago.
- MetLife (MET -0.6%) - rated a Buy by Kinar - may disappoint in the headline number thanks to a boosted share count due to the conversion of $1B in equity units. Investors hope to hear some clarity on buybacks, but shouldn't hold their breath until the insurer gets more guidance from the Fed.
- Gallagher rates AIG at Outperform though the insurer continues to suffer an underwriting loss - this creates opportunity, however, for a catalyst going forward from improvement in this trend.
Jan. 28, 2014, 8:37 AM
- They're working together to try and persuade regulators insurance companies don't carry the risks of the big banks and shouldn't be subject to the same rules for figuring capital levels, reports the WSJ.
- The group of seven includes MetLife (MET), Prudential (PRU), Nationwide, Mutual of Omaha, State Farm, New York Life, and TIAA-CREF.
- D.C. has already given AIG and Prudential the SIFI brand and Met is expected to also be so-designated in the coming months. AIG is notable for its absence from the coalition as its chief Bob Benmosche takes a make no waves approach with D.C.
- The push promises to be one of Janet Yellen's first tests as Fed chief as the insurers fall under central bank purview for the first time. The Fed has given itself until January 2015 to craft rules. Records show senior execs from MetLife and Prudential have each met with Fed officials - including Janet Yellen - eight times since August 2012.
Jan. 27, 2014, 3:40 PM
- The prospect of higher rates helped the life insurers on their big 2013 run, but - priced in and with rates still pretty low - what's going to be the catalyst going forward? Maybe capital management, namely repurchases, writes Adam Cancryn. Buybacks can be made when convenient and boosts EPS in this slow growth environment, while dividends lock the company into a quarterly payout schedule it may not want to keep.
- Acquisitions? Sector valuations are a lot closer to historical norms now, says Macquarie's Sean Dargan, and a deal might be the way for a company looking to spur growth and attract investor attention. "At the end of the day, you want there to be earnings growth, not just EPS growth due to share repurchase," Dargan says. "If you can't do that organically, I think it makes sense to be acquisitive."
- The bottom line is lower rates fed through (in a negative way) to the bottom line very slowly, and higher rates are going to boost income just as slowly. Performance going forward might be less about industry conditions and more about individual strategic decisions.
- "We started out the year recommending everything," says RayJay's Steven Schwartz. "We're down to four companies, which tells you where my head is at."
- Names of interest: MET, PRU, MFC, SLF, PRI, VOYA, PL, LNC.
Jan. 23, 2014, 2:50 AM
- AT&T (T) will book a non-cash gain of approximately $7.6B on its Q4 earnings, due to changes in its pension fund and retiree benefit plans.
- AT&T has altered its assumptions on interest rates and is enjoying a better-than-expected return on assets,
- However, the carrier is also taking a $500M charge for a voluntary retirement package that 4,200 workers accepted. (8-K)
- Meanwhile, AT&T has sold an office complex east of San Francisco to MetLife (MET) and Sunset Development for over $250M. AT&T will lease back half of the 1.8M square foot property. MetLife will own 49% of the asset.
Jan. 13, 2014, 10:39 AM
- The new 10-year distribution agreement expands on an existing deal expiring in 2015, and will allow MetLife (MET -0.1%) to provide credit insurance products to Citigroup clients in 15 countries through 2025. In 13 of the countries, MetLife will be the exclusive provider, and the products will be available to Citi bank branch and credit card customers in all 15.
- Press release.
Jan. 8, 2014, 7:15 AM
Jan. 6, 2014, 5:22 PM
Jan. 6, 2014, 7:28 AM
- The chance of meaningful ROE expansion thanks to long-term care and U.S. mortgage insurance is behind Genworth's (GNW) upgrade to Buy at UBS, with price target hiked to $18 from $13.
- MetLife (MET) is cut to Hold as the shift away from riskier insurance segments and the resumption of boosted capital returns will take longer than expected. The price target is increased to $58 from $56.
Jan. 3, 2014, 7:42 AM| 4 Comments
Dec. 30, 2013, 7:38 AM
- Captives are reinsurance units set up by life insurers to take on business from the parent, and, industrywide, the entities hold tens of billions of potential obligations to policyholders even as their financial disclosure and funding requirements are easier than that of the parent. For years, state regulators have raised concerns the setup is masking financial health.
- Those in contact with the SEC over the matter include MetLife (MET), Genworth (GNW), Hartford (HIG), Protective Life (PL), and Reinsurance Group of America (RGA). In general the group says the captives are adequately funded and note the setup requires approval from state regulators where the insurer is based and from where the captive is located.
- Protective LIfe - in a recent earnings filing - said discontinuation of the practice "could have a material adverse impact on the company's financial condition," and Reinsurance Group said it might have to increase prices.
Dec. 19, 2013, 8:00 AM
- Finding something to do with its cash other than buybacks, MetLife (MET), as expected, inks a deal to buy 51% of AmLife Insurance - the insurance arm of Malaysia's AMMB Holdings - for $256M.
- As part of the deal, Met will also enter an exclusive 20-year agreement to sell insurance products through AMMB's banking network.
- "For MetLife, it's an opportunity for us to enter the Malaysian market, which we believe is an attractive market given the under-penetration of life insurance, a rising middle class and growing disposable incomes," says Nirmala Menon, SVP at MetLife in Asia.
Dec. 17, 2013, 3:53 PM
- He doesn't name names, but Lincoln Financial (LNC -1.6%) is probably on the mind of Bill Wheeler, president of MetLife's (MET -1.2%) Americas unit, noting competitors who are expanding in the variable annuity business are holding less capital against the products. The expansion, he says, is "literally a doubling-down" on the product that nearly brought down more than one insurer during the financial crisis.
- Met and others (HIG to name one) have aggressively cut back sales of variable annuity products, leaving plenty of share for Prudential Plc's Jackson National (#1 today vs. #12 in 2007), and second-place Lincoln National.
- The strategy is paying off for The Linc which has nearly doubled this year amid a 25% ROE in the annuity unit. “Right now is one of the best times that I’ve experienced in terms of selling variable annuities, from a return standpoint," says SVP Brian Kroll.
- Met expects to sell about $11B of VAs this year vs. $17.7B in 2012, and $28.4B the year before that.
Dec. 17, 2013, 7:27 AM
- MetLife (MET) is in exclusive talks to purchase a majority stake in AMMB Holdings life insurance units for about $246M, reports Bloomberg. The two are finalizing the details and hope to submit a plan for regulatory approval by year-end.
- In a quest for growth outside of sluggish home markets, Met and its life insurance competitors have been scouring Southeast Asia for acquisitions, and more than $7.9B in deals have been announced over the last two years.
Dec. 13, 2013, 9:41 AM| Comment!
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MetLife Inc is a global provider of insurance, annuities & employee benefit programs in United States, Japan, Latin America, Asia, Europe & Middle East. It offers life insurance, annuities, property & casualty insurance, and other financial services.
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