Feb
17
MetLife Inc, America’s largest life insurance group, reported a surge in fourth-quarter profit on Tuesday, mainly attributable to the continued development of its international insurance operations and pronounced derivative gains.
In a company filing, Metlife reported fourth quarter 2011 net income of US$1.1 billion, or US$1.06 per share, and operating earnings of US$1.4 billion, or US$1.31 per share, which equated to a 17 percent rise on 2010’s figures and topped previous market estimates. The New York-based insurer credited much of this success to their recent acquisition of ALICO, a major life insurance unit whom they bought from American International Group Inc (AIG) for US$16.4 billion in 2010. Metlife had long been looking to establish a more global brand and distribution platform. The acquisition of Alico, who had offices in over 50 countries, has provided the company with meaningful new sources of diversified earnings through their access to new Asian, European, Middle Eastern and Latin American insurance markets. Total international sales grew by 12 percent compared with the combined MetLife and Alico results in fourth quarter 2010.
This trend was made further evident in the MetLife full year report, which was released simultaneously on Tuesday. Buoyed by the Alico purchase, Metlife’s international business (including premiums, fees and other revenues) was worth US$3.8 billion in 2011, with operating earnings growing by a remarkable 89 percent to US$570 million for the year. According to Metlife, these increases were partly offset by the negative impact of foreign currency exchange rates. In addition, in Latin America, Metlife’s revenues grew due to increased premium levels in Mexico, Chile and Argentina. Premiums, fees and other revenues furthermore benefited from robust development in the Middle East and Eastern Europe, according to MetLife. The insurer also singled out its performance in Japan, where sales and operating earnings grew by 3 percent to US$326 million for the quarter. Higher net investment income and improved underwriting results in accident and health insurance enabled Metlife to improve their margins in mature, claims-heavy environment. Premiums, fees and other revenues in Japan were US$1.8 billion, higher than in the fourth quarter of 2010 and relatively unchanged from the third quarter of 2011.
Metlife’s investment activity has also played a big role in their substantial quarterly gains. Like other large insurance companies, MetLife use derivatives as part of their broader portfolio management strategy to hedge against a number of long-term risks, and this includes potential changes in interest rates and foreign currency exchange rates. Metlife reported total derivative net gains of US$351 million after tax during the fourth quarter 2011, a far cry from the US$1.1 billion derivative net loss noted in 2010. Net investment income in 2011 came in at US$4.94 billion in total. Total assets are now worth nearly US$800 billion, up by 9 percent from year-end 2010.
Metlife was able to report growth in its home US market last year as well, despite facing a more difficult regulatory environment, low interest rates, and waning demand for certain insurance products. According to the company filing, Metlife’s US-based premiums and other revenues rose by 7 percent to US$7.6 billion in 2011, principally on sales of retirement products and increased corporate benefit funding. US business operating earnings meanwhile increased by 4 percent to US$932 million on the year, due to improved underwriting results in group life and health insurance business lines.
While MetLife’s international business has expanded, its performance in the US has remained relatively flat and this has necessitated the firm’s recent global restructuring effort. In November, MetLife reorganized its business structure into three different geographic regions – the Americas, Europe-Middle East-Africa, and Asia. This move will better reflect the company’s improved global reach.and will target all the markets where sustainable premium growth is feasible more equally. Metlife are expected to report financial results under this new structure by the first quarter of 2012. According to some industry observers, MetLife’s business in the US could improve through this reorganization. By bundling US insurance business together with their Latin American business, an under-penetrated and populous region forecast for growth, MetLife may be able to equalize mature market weaknesses in the short-to-medium term and manage its margins more effectively until, and if, US consumer spending behaviour improves.
Despite ongoing global economic volatility, MetLife’s executives expect that company profits could rise again in 2012, driven by both improved US retirement product sales and the continued development of international insurance markets. Steven A. Kandarian, Chairman and CEO of MetLife, explained in the company filing that the company had made admirable progress in 2011 and were by no means done yet. “MetLife had a solid year and a strong fourth quarter, even in the face of some significant market pressures. We delivered higher earnings per share over 2010. Our capital position is strong and getting stronger. And our ability to grow operating earnings in the face of low interest rates remains intact. In short, we think we’re the best-positioned company in the life insurance sector to deliver shareholder value.” In the aftermath of the global financial crisis, large multinational insurers like AIG, AXA and MetLife will need to find value by re-positioning their global operations to ensure they have access to insurance markets in the emerging economies that now offer the most profound earnings opportunities going forward.
Insurance Company Mentioned
MetLife
MetLife is the largest life insurance company in the United States, with total assets of US$785 billion and over US$4.2 trillion of life insurance in force. Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Nov
23
MetLife Inc, the United States’ largest life insurance group, has decided to reorganize their business infrastructure in order to better represent the increased role international insurance markets have come to play in contributing towards the company’s overall growth and development over the past few years.
On Tuesday, New York-based MetLife announced that they would be splitting their business structure from the previous two sub-divisions, with one branch representing only their home US market and another focused on the entire international insurance sector, into three new regional divisions, each tasked with managing distinct geographic areas in which the life insurer is now serving an wider number of customers. According to the company statement, MetLife’s three new regional business divisions will be the Americas, EMEA (Europe, the Middle East and Africa) and Asia. The change will enable MetLife’s business to more closely match those of its international rivals like AIG and AXA.
MetLife also outlined a raft of high-end personnel changes that will accompany this structural overhaul. Each of the company’s new regional divisions will have its own president and executive team and this has necessitated considerable movement within the firm. MetLife has appointed William J. Wheeler, who had been their chief financial officer since 2003, to be president of the newly combined Americas division, with Executive Vice President Eric Steigerwalt serving as interim CFO while the company searches for a successor. Michel Khalaf meanwhile was named president of the new EMEA division, stepping up from his previous position as chief executive of MetLife’s Middle East, Africa and South Asia region. The company is still searching for a president to run the new Asia division. In the meantime, that region will report directly to MetLife President and CEO Steven A Kandarian, who threw his support behind these new moves. “To reach its full potential, MetLife needs an organizational structure that leverages the best of both MetLife and Alico,” CEO Kandarian said in the company statement, adding that “this structure will lay the foundation for a global company. Each of our new regions have both mature and developing markets, both of which are critical to shareholder-value creation. At the same time, they will be able to draw on strengths from across each region to drive collaboration and efficiencies.”
MetLife’s reconfiguration eliminates some of the company’s previous executive positions. MetLife will no longer have a president solely representing their U.S. business, with the previous head, William J. Mullaney, now moving on to other opportunities. Meanwhile the man who served previously as president of the company’s international business sector and was integral to the Alico acquisition, William Toppeta, has plans to retire. Toppeta will remain with MetLife as the vice chair and advisor for the EMEA and Asia regions through May 31, 2012. In addition to these moves, MetLife plans to move executive vice president Maria R Morris to head the global employee benefits business unit, while Marty Lippert will lead global technology and operations division.
All of these moves are following a productive year for MetLife, one which has seen the company expand their global footprint and operating scale significantly to offset the tepid performance of their home US market. The New York based insurer reported in October that net income for the third quarter reporting period had grown by more than tenfold year-on-year, beating market analyst estimations on the back of substantial derivative gains, increased investment income and the continued expansion of its international sales division from its purchase of Alico from AIG last year. Cumulatively, for the three months ending September 30, MetLife earned US$3.55 billion, a significant improvement on the US$286 million earned for the same quarter in 2010. Total third quarter revenues meanwhile were US$20.5 billion, up from US$12.3 billion in the corresponding period a year ago. In the past 12 months MetLife has earned roughly US$5.6 billion.
MetLife has credited much of their success so far this year to their Alico acquisition and expect the new assets to contribute significantly to their bottom line going forward. MetLife’s investment portfolio had risen from US$383.2 billion to US$493.2 billion by the end of the third quarter 2011. The US life insurance giant had long been looking to develop its global reach and distribution platform, and in 2010 the company was able to purchase American Life Insurance Company (ALICO) from a struggling AIG for US$16.4 billion to accomplish this. The acquisition of Alico, who operates out of more than 50 countries, has provided MetLife with meaningful new sources of diversified earnings through their access to new Asia Pacific, European, Middle Eastern and Latin American insurance markets. In the most recent quarterly statement, MetLife’s international segment noted that operating earnings had already risen to US$578 million from the US$189 million reported last year.
MetLife’s international business has expanded in concurrence with a waning performance in the US, gradually overall approaching earnings parity between the two segments, and this has necessitated the firm’s global restructuring effort, which will target all the markets where sustainable premium growth is feasible more equally. Through the third quarter 2011, operating earnings in Metlife’s home US market fell by 23 percent, to US$655 million, due to increased insurance reserves, persistently low interest rates and overall flagging consumer confidence. According to some industry observers, MetLife’s business in the US could in fact improve through this reorganization. By bundling US insurance business together with Latin America’s, an under-penetrated and populous region targeted for growth, MetLife may find itself able to equalize mature market weaknesses in the short-to-medium term and maintain it’s margins effectively until the global economy recovers. Overall, multinational insurers such as AIG, AXA and MetLife need to find value in re-positioning their activities to ensure that they have access to the emerging protection markets that are now providing all insurers with the most profound earnings growth opportunities.
Insurance Company Mentioned
MetLife
MetLife is the largest life insurance company in the United States, with total assets of US$785 billion and over US$4.2 trillion of life insurance in force. Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Sep
14
This week, MetLife Alico announced a new partnership with Mashreq Bank, one of the MENA region’s leading financial institutions, to provide new life insurance products and other protection options through their facilities in Bahrain.
Read the rest of the article about MetLife Alico partners with Mashreq in Bahrain article.
Aug
3
Mashreq Qatar, the Doha-based arm of one of the MENA region’s leading financial institutions, has this week launched a new critical illness cover policy, titled Wealthcare Insurance, in partnership with MetLife Alico. With the local economy set to continue growing, Mashreq Qatar has been committed to providing enhanced wealth management services for clients in the Emirates and this new insurance proposition follows a slew of additional savings and protection plans, mutual funds, fixed income securities and treasury product based solutions.
Read the rest of the Mashreq Qatar Announce Tie-Up with MetLife Alico article
Jul
29
India’s second biggest public sector lender, Punjab National Bank (PNB), has agreed to acquire a 30 percent stake in MetLife India for an undisclosed amount, becoming the single largest shareholder in the private insurance company. The move marks the bank’s first foray into the insurance business. Once the transaction is finalized, the two parties have agreed the joint venture company will be renamed PNB MetLife India Ltd to leverage the combined strength of the two brands in the Indian market.
MetLife India, affiliate of global insurer MetLife Inc., the largest life insurer in the United States, was incorporated as a joint venture operation between MetLife International Holdings, The Jammu and Kashmir Bank, M Pallonji and Co, and other private stakeholders in 2001. PNB officials announced that the acquisition of a 30 percent stake in the insurance company would come through issuance of fresh equity, which would in turn dilute the existing percentages of MetLife India’s stakeholders proportionately. After the deal, MetLife US’ stake would reduce to from 26 percent to an estimated 19 percent. India’s current foreign direct investment (FDI) regulations prevent foreign entities from holding more than 26 percent of any Indian insurance enterprise, a rule that could soon change. With FDI capped as it is in India, investments from local entities through fresh shares have become the only option available for companies looking to raise their overall capital base. MetLife would plan to increase its stake back to the 26 percent limit within the first few months of the closure of the deal.
William J Toppeta, President of MetLife’s international operations, told reporters on Thursday that the deal with PNB would grant the insurer the necessary capital to service its growing business in India. “Given its global significance, India is a strategic focus market for MetLife. We believe that the addition of an outstanding financial institution like PNB as a shareholder and partner will greatly enhance MetLife India’s ability to move into the top tier of life companies here. We value PNB and our current shareholders for their integrity, market knowledge, distribution power and financial strength,” Toppeta told the press, adding that if and when the country’s FDI limits are relaxed, Metlife would consider increasing its stake further in their Indian branch.
The path which lead PNB to purchase a stake in Metlife India began in December 2010, when the bank invited expressions of interest (EOI) from both Indian and foreign insurance companies to set up a strategic partnership. PNB received responses from some 26 different insurance companies, each offering their own business model proposal. After evaluating the technical bids, the bank put three life insurance companies on the final short list: Aviva, Metlife and Bharti AXA. Based on the financial bids and a more diversified shareholding, PNB ultimately accepted MetLife India’s offer although the fiscal details of the deal have yet to be disclosed. The transaction is still subject to the approval from The Reserve Bank of India, Insurance Regulatory and Development Authority (IRDA) and other regulatory bodies. The deal would be expected to close by end the end of 2011.
In addition to this influx of fresh capital, the two companies will benefit from a 10-year exclusive distribution arrangement. As part of the deal, PNB have agreed to promote and distribute MetLife India’s insurance products through its branch network. MetLife already has a similar agreement with Karnataka Bank and Barclays in India. The distribution platform PNB provides could prove to be the most distinctive advantage for MetLife. PNB is the largest nationalized bank in India, with a network exceeding 5,000 branches and over 60 million active customers. According to Metlife India Managing Director Rajesh Relan, this strategic affiliation would enable the insurance company to more than double its existing customer base, diversify its products offered, and quickly establish itself amongst the country’s leading insurance providers. “With 60 percent branches in the rural and semi-urban areas, PNB is uniquely positioned to take insurance to the deep pockets of India. This partnership has the potential to drive the company into the top tier of Indian life insurers and more than double its market share,” Relan told reporters in New Delhi.
PNB Chairman and Managing Director K.R. Kamath added that the deal would be beneficial to the bank as it would give them more options in interacting with clients, helping to maintain its leadership position in the Indian financial services market. “The partnership with MetLife will provide PNB insurance expertise and bancassurance capabilities that will be an asset to the bank as it pursues its growth strategy in India and seeks to expand its leadership in the Indian financial services market,” Kamath said.
Since the insurance market in India was first opened up to the private sector and international investment in 1999, total insurance penetration has doubled and the domestic protection industry has overtaken several developed markets in output. There has been a substantial rise in insurance coverage, with both the number of life and health insurance policies increasing many times over. While premium income in the Indian insurance market within the upcoming decade is projected to reach US$ 350-400 billion, a combination of regulatory issues and fierce competition between both local and international companies (including AIG, Allianz, Standard Life and AXA) is expected to hamper profitability and constrict many insurers’ margins in the short term. Recent moves made by India’s regulatory authorities have opened up many of the country’s industries to greater foreign capital investment. This would be a particularly welcome development for the international insurance industry.
Insurance Companies Mentioned
MetLife
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Mar
30
Chinatrust Financial Seal MetLife Taiwan Deal
Filed Under Insurance Company, Life Insurance, MetLife | 2 Comments
Chinatrust Financial Co. Ltd, Taiwan’s third-largest financial services provider by assets, has agreed to purchase US-based MetLife Inc’s Taiwanese life insurance unit for US$180 million. With the acquisition of MetLife Taiwan, Chinatrust will finally be able to enter the life insurance market it has long coveted.
The ownership transfer deal, which is pending approval of the Insurance Bureau under Taiwan’s Financial Supervisory Commission, will be wholly financed by Chinatrust Financial. The company has been attempting to both internationalize, and diversify its financial products, and build a strong platform in the insurance sector. Chinatrust Financial had competed for every foreign life insurance unit put up for sale in recent years, pursuing every opportunity to enter the local market. The company’s most recent bid attempt resulted in a failure to buy Nan Shan Life Insurance, the Taiwanese branch of AIG, in January.
Chinatrust Financial has already experienced success in the bank insurance sector in Taiwan, becoming a domestic industry leader through its subsidiary Chinatrust Commercial Bank. The bank generated premium revenue of over NT$100 billion (US$3.4 billion) for two consecutive years through its bancassurance business platform; with profits exceeding NT$16 billion (US$ 542 million) for 2010. The addition of MetLife will expand Chinatrust’s capacity to sell insurance, and diversify their revenue sources.
Speaking at an evening press conference, Chinatrust Financial company president ,Daniel Wu, said of the upcoming purchase of MetLife Taiwan: “This will not just be a simple financial investment, but a strategic investment,” he added “the group wanted to purchase a life insurance unit so it could tap into the local market and use it as springboard into the Chinese market.”
Chinatrust Financial has promised to retain MetLife Taiwan’s 624 domestic employees, and fully guarantee the rights of the company’s 307,000 preexisting policy holders. Chinatrust are prepared to pool resources from the company’s other financial services subsidiaries to help make inroads into the lucrative mainland China insurance market. President Wu said he planned to increase Metlife Taiwan’s assets up to NT$500 billion (US$ 16.7 billion) from less than the NT$100 billion (US$3.4 billion) at present.
MetLife Taiwan, founded in 1989, is the fourth largest foreign life insurance company in Taiwan by gross premium, totaling NT$14billion (US$ 480 million) in gross premiums for 2010. MetLife management, however, has been looking to divest itself from its Taiwanese branch due to limited growth prospects, and an unprofitable local investment environment. MetLife’s regional managing director, Peter Smyth, explained: “The scope of business prospects for MetLife Taiwan is limited due to the absence of its own distribution channel,” adding, “that is not a concern with a domestic financial group, however.”
This was Metlife’s second attempt at offloading their Taiwan unit. In April 2010, the company had agreed a deal with Waterland Financial Holdings Co, a smaller financial conglomerate, to purchase Metlife Taiwan for about US$ 112 million. The move was struck down by Taiwanese financial regulators in October, citing concerns over Waterland’s financial and management capacity to run the life insurer after the acquisition.
Metlife has become the latest major multinational investment company to sell its stake, or a significant share of its assets, in Taiwan’s US$ 52 billion insurance market. The forecast for Taiwanese business has remained slow-moving in the aftermath of the global economic crisis, and the market has been inhibited by historic business secured at base interest rates which are no longer sustainable. New international accounting rules that increase capital requirements for insurers, coupled with strict local regulators and general market volatility, have led many international firms to question their continued presence in the country. All of this is occurring at a time when profits, and business opportunity, return in regional neighbors such as, Japan, Thailand and particularly China.
Prudential, Aegon and the ING Group all have retreated from Taiwan, usually selling to local financial services companies who are looking to diversify into insurance. Following the 2008 economic crisis, ING agreed to sell its life insurance business to Fubon Financial Holdings for US$ 600 million, Aegon followed suit for only $65 million a year later. China Life acquired Prudential’s Taiwanese branch in 2009. In addition, MassMutual International Holdings Inc. sold its 39 percent stake in joint venture MassMutual Mercuries Life Insurance Co and even more recently AIG, after a protracted bidding war, sold Nan Shan Life Insurance to Taiwan-based Ruen Chen Investment Holdings Co. Both New York Life Insurance and Aviva PLC are thought to be considering their exits from the island country as well.
Merger and acquisition activity throughout the rest of Asia is set to maintain significant growth in 2011 due to stronger investor confidence in the market. Insurance business growth in Asia is expected to outperform that of other more mature markets, with Vietnam, Indonesia and China leading the way.
Insurance Companies Mentioned:
Chinatrust Financial
Chinatrust Financial Holding Co Ltd. Is a financial holding company based in Taiwan. The firm operates business through commercial banking, financial market services, trading, investment consulting, insurance business and many other services. The company presently has operations in Taiwan, Hong Kong, Vietnam, USA and China.
MetLife
Metlife Insurance: Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
Nan Shan
Nan Shan Life Insurance Company, Ltd. was established in July 1963. After its restructuring in January 1970, Mr. K.K. Tse, the then Chairman of American International Underwriters, became the first Chairman of the company. In forty years, Nan Shan has become a super insurance company with the most professional management, the best operational performance, and a solid financial foundation. Its agency force has been recognized as the best in Taiwan’s life insurance industry.
Prudential
Prudential life Insurance has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
ING
ING provides banking, investments, life insurance and retirement services and operates in more than 50 countries. It serves over 85 million private, corporate and institutional customers throughout Europe, North and Latin America, Asia and Australia.
Fubon Life
Fubon Life was founded in 1993 and is based in Taipei, Taiwan. Fubon Life provides life insurance and health insurance services. Fubon Life Insurance Co. Ltd. was formerly known as Fubon Life Assurance Co., Ltd. and change its name to Fubon Life Insurance Co. Ltd. in June 2009. Fubon Life operates as a subsidiary of Fubon Financial Holding Co. Ltd.
Feb
25
AIG Reports Improved Results
Filed Under AIG, Chartis, MetLife | 6 Comments
The American International Group (AIG) reported net income of US$11.2 billion for the fourth quarter period in 2010, which ended on 31st December 2010. The bailed out insurer’s income included the sale of assets as it restructures its business in order to repay the loan received from the US government in 2008 following the global collapse of financial markets.
The New York based insurer’s full year earnings for 2010 totaled US$7.8 billion, reversing the loss in 2009 which amounted to US$10.9 billion. AIG’s fourth quarter 2010 earnings of US$11.2 billion compares with the loss of US$8.87 billion in the same period last year.
However, after disregarding income generated from the sale of AIG assets in 2010, the insurer had an operating loss of US$2.2 billion from its global operations, compared to an operating loss of US$1.3 billion last year.
The troubled insurer received a total of US$182 billion from the US federal government to rescue the insurer from the brink of collapse in 2008, after the US sub-prime mortgage crisis triggered a domino effect in the world financial markets. Since receiving the US government bailout, AIG has been restructuring global operations, which has included selling off international insurance subsidiaries, in order to generate capital to repay the US taxpayer.
Robert H. Benmosche, AIG’s President and Chief Executive Officer, said: “We completed several key restructuring milestones in the quarter and we remain focused on long-term growth and building value at our ongoing insurance operations and other businesses.”
Included in AIG’s fourth quarter earnings was a net charge of US$4.2 billion for AIG’s property insurance arm Chartis. The injection of capital was necessary to strengthen Chartis’ provision against losses as the insurer is expected to face stiff competition in this segment of business. Chartis worldwide net premiums written amounted to US$7.6 billion in the last quarter of 2010.
AIG has sought to restructure the specialist property insurance business with Chartis by rationalizing activities and concentrating on less volatile markets, seeking to write more business with higher margins.
Part of AIG’s restructuring programme saw the insurer sell its Alico subsidiary for US$16.2 billion to US rival Metlife, with the cash from the sale – included in the fourth quarter 2010 results – going towards repaying the US Federal Reserve Bank.
AIG also negotiated the sale of its Japanese insurance arms AIG Star Life Insurance and AIG Edison Life Insurance to another US insurance rival, Prudential Financial, for approximately US$4.8 billion; the sale being completed on the 1st February 2011. The proceeds from the sale will be used to make further repayments to the US government.
Meanwhile in Taiwan, AIG had a bid for its Nan Shan Life company from a Hong Kong led consortium, Premium Financial, rejected in September 2010. This was on the grounds that it did not meet local regulatory criteria. However, in January 2011 a US$2.16 billion cash bid from Taiwan-based Ruen Chen was accepted by AIG for the Nan Shan operation, with the funds again being used to help repay the outstanding US government loan.
Speaking on the future of AIG, Mr. Benmosche said: “In 2011, as we emerge from our restructuring, AIG will focus on growing our already strong businesses domestically and around the world, risk and capital management, strategic asset management, and cost savings throughout the organization.”
AIG’s restructuring of its global insurance network has meant that it has divested business operations in foreign and domestic ventures which did not offer significant returns for the New York based insurer. However, while AIG continues its streamlining, it has retained its profitable Asian arm – the American International Assurance Group (AIA) – which is the leading life insurer in the dynamic Asian region.
AIA is seen as AIG’s jewel in the crown, with the latest company report reflecting the importance this market holds for the group as full year profits jumped by 54 percent in 2010 to reach a total of US$2.7 billion. In 2010, AIA was subject to a US$ 35.5 billion takeover bid from the major UK insurer Prudential; this was finally dropped by the British insurer because shareholders were not prepared to underwrite the initial bid price and a lower bid was not acceptable by AIG. This subsequently lead to AIA being floated on the Hong Kong Stock Exchange in October 2010 in one of Hong Kong’s largest initial public offerings (IPOs), which generated US$17.9 billion. As a result of the better than expected trading results for the year ending 30th November 2010, shares in AIA valued the company at US$32.6 billion at the close of trading on the Hong Kong stock exchange on the 24th February 2011.
Although AIG, along with other insurers, is facing challenging trading conditions in 2011 – particularly in the mature markets in the USA and Europe – with the effects of government imposed austerity measures likely to impact on disposable incomes, the group is well placed in the emerging growth market which exists in the Asia-Pacific region through its AIA business.
The AIA operation is now well placed to exploit the growth potential in the emerging markets in China, Thailand, Vietnam, Indonesia and Malaysia and is expected to make a significant contribution to AIG’s financial results in 2011.
Insurance companies mentioned:
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
AIA
The AIA Group is a leading life insurance organisation in Asia Pacific that traces its roots in the region back more than 90 years. It provides individuals and businesses with products and services for life insurance, retirement planning, accident and health insurance as well as wealth management solutions. Through an extensive network of more than 320,000 agents and approximately 23,500 employees across 15 geographical markets, the AIA Group serves the customers of over 23 million in-force policies in the region. The AIA Group has branch offices, subsidiaries and affiliates located in jurisdictions including Australia, Brunei, China, Hong Kong, India, Indonesia, Macau, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
Chartis
A leading property-casualty and general insurance company, Chartis has over 45 million policyholders in 160 countries worldwide. With more than 90 years experience in the insurance industry, and a range of progressive products, Chartis aims to help clients comprehensively manage risk
Prudential Financial Inc
Prudential Financial Inc. is a financial services leader, with approximately US$750 billion of assets under management as at September 2010. Prudential Financial operates in the United States, Europe, Latin American and Asia, with approximately 42,000 employees worldwide
Prudential
Prudential has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
MetLife
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Nan Shan
Nan Shan Life Insurance Company, Ltd. was established in July 1963. After its restructuring in January 1970, Mr. K.K. Tse, the then Chairman of American International Underwriters, became the first Chairman of the company. In forty years, Nan Shan has become a super insurance company with the most professional management, the best operational performance, and a solid financial foundation. Its agency force has been recognized as the best in Taiwan’s life insurance industry.
Dec
7
MetLife to Grow Through Alico Acquisition
Filed Under Insurance Company, Life Insurance, MetLife | 7 Comments
MetLife’s purchase of AIG’s Alico in November this year is forecast to achieve significant improvements in earnings for the company in 2011. The scope for an increase in business activity was set out at MetLife’s annual investor’s conference held on the 6th December 2011, with growth primarily expected to be delivered from outside the American insurance market.
The New York based insurer MetLife highlighted three key areas for the generation of operating earnings next year following the acquisition of Alico for $16.2 billion. Premiums from US corporate benefits and from international life and international accident and health insurance were expected to be the main sectors for generating earnings of between $5.1 -5.5 billion by the end of the fourth quarter of 2010.
However, the insurer predicts that US business operations will experience a decline in earnings in 2011, but remains positive about the acquisition of Alico driving future growth through its presence in global markets. MetLife’s purchase of Alico from US rival AIG earlier this year meant that MetLife dramatically increased its presence on the global stage.
The acquisition by MetLife meant that the US insurer gained access to Alico’s life insurance, retirement planning, wealth management, accident and health insurance products, which are available for both individual customers and corporate clients. In addition to Alico’s existing clientele and product range, MetLife gained access to new international markets, providing substantial opportunities for the insurer.
Chairman, president & chief executive officer of MetLife C. Robert Henrikson, said: “With our leading positions in the U.S. and our expanded global reach resulting from the acquisition of Alico, we are poised to achieve strong results next year and beyond.”
In October this year, MetLife reported third quarter net earnings totaling US$286 million compared to a loss of US$650 million for the same period in 2009. While third quarter earnings from MetLife’s US operations remained static in 2010, profits from international markets offset these poor returns amounting to global earnings of US$191 million – reflecting a 25 percent increase in operational earnings during the third-quarter period. There were significant improvements in returns from Chile, Korea and Hong Kong operations, along with increases in Europe, the Middle East and India (EMEI) – predominately driven by premium growth in India.
MetLife is planning to grow premiums, fees and other revenues by 30 percent in 2011, which will amount to between an estimated US$45.8 billion and US$47 billion. The US insurer also highlights the intention to invest in expanding its international network and to maintain a disciplined approach to business operations to ensure it is able to generate a profit.
The Alico deal means that MetLife gained access to Asian, European and Latin American insurance markets cementing the US life insurer’s global presence. As the economic tide changes in the wake of the 2007-2008 global credit crisis, multi-national insurers such as MetLife have been re-positioning activities globally to ensure that they have access to emerging markets, which are now providing insurers with new growth opportunities.
“We have accomplished a tremendous amount this year, strategically growing our businesses while successfully completing the largest acquisition in this company’s history” said C. Robert Henrikson.
MetLife is predicting challenging conditions within its USA operations, with the market expecting to remain stagnant during 2011. Also, MetLife is expecting tough times within the Japanese insurance market – which was an Alico stronghold – as the market continues to suffer from difficult trading conditions. However, MetLife are now strategically well placed in the growing emerging markets in the Latin America and Asian regions.
The news of a recent free trade agreement (FTA) between the US and South Korea was welcomed by MetLife – who operate in South Korea – as the commitment for both governments will address existing regulatory hindrances the insurer has experienced in this market. MetLife has been present in South Korea for more than 20 years, and in recent times, the country has expanded economically creating an increasing demand for protection products.
Metlife is the largest life insurers in the US and, along with international counterparts such as the Prudential, AXA, Zurich and US rival Prudential Financial, has increased its international presence in order to optimize benefits from emerging and developing markets. This is planned to facilitate higher growth returns from new premium business to offset the more challenging times in established outlets.
Insurance Company Mentioned:
MetLife
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Nov
22
Prudential Funds Purchase of AIG’s Japanese Insurance Units
Filed Under AIG, Insurance Company, Life Insurance, MetLife | 6 Comments
American insurance group Prudential Financial Incorporated has announced completion of financing transactions to contribute to the purchase of Japan-based insurers AIG Star Life Insurance Co and AIG Edison Life Insurance Co from its American rival AIG.
Prudential Financial, one of America’s largest life insurers, raised roughly US$ 2 billion (€ 1.45 billion) through the sale of over 18.3 million shares of Prudential Financial common stock, together with a public offering of US$500 million (€363 million) 4.50 percent senior notes and US$500 million (€363 million) 6.2 percent 30 year senior notes. The financing transactions by the US insurer helping to fund the purchase the two Japan-based insurance companies.
The sale of AIG’s two Japanese assets will help the US insurer repay the US Treasury and the Federal Reserve of New York for the bailout it received at the height of the global financial crisis in 2008; this amounted to approximately US$182 billion (€132 billion) at the time. The deal is expected to be completed in the first quarter of 2011.
The New Jersey based insurer Prudential Financial is aiming to pay US$4.2 billion (€3 billion) in cash and absorb US$600 million (€435 million) in debt from the two Japanese insurance businesses currently held by AIG.
The deal came to light earlier in the year, with Prudential Financial working towards generating additional capital to fund the purchase of AIG’s Star Life Insurance and AIG Edison Life Insurance from AIG. AIG Star Life is engaged in life and retirement plans for individuals and groups. AIG Edison Life offers life insurance services within Japan; the Japanese insurer has established distribution channels operating throughout the country. Prudential Financial stated that current policyholders with Star and Edision will not be affected by the future transaction.
AIG recent released third-quarter earnings for 2010, reporting small gains in core business activities. However, the troubled US insurer posted a loss of more than US$2 billion (€1.45 billion) related to sales linked to the AIG group’s restructuring program. The latest figures indicate the difficulties the AIG group has experienced in generating funds to repay the US government for its bailout.
The Prudential Financial Incorporated announced third quarter 2010 results with net income attributed to its financial services business amounting to US$1.2 billion (€872 million), which is equal to US$2.46 per (€1.7) common share.
Earlier this month John Strangfeld, Chairman and Chief Executive Officer of Prudential Financial, said about the future deal “With our acquisition of AIG Star Life and AIG Edision Life expected to close in the first quarter of 2011, we look forward to augmenting our footprint as a leading foreign life insurer in Japan service protection and retirement needs and building on our success in the Japanese insurance market”.
Earlier in 2010, AIG’s disinvestment program included the sale of Alico – another Japanese subsidiary – to MetLife for US$15.5 billion (€11.2 billion). The move by MetLife allowed it to strengthen its presence in the Japanese insurance industry and to substantially increase its global reach.
The acquisition of the Japanese companies AIG Star Life Insurance and AIG Edison Life Insurance will mean the US insurer Prudential Financial is expanding its reach in a mature Asian market, but in an economy which has struggled to gain stability since the financial tsunami took effect in 2007-2008. Prudential Financial – the second largest life insurer in the US – currently has assets amounting to roughly US$750 billion (€545 billion) under management, with businesses stretching across the USA, Europe, Latin America and Asia providing a range of indemnities which including life insurance, retirement products, mutual funds, investment products and property services.
The acquisitions by Prudential Financial will boost the US-based insurers reach in the world’s third largest economy; “The addition of these operations to our existing businesses in Japan will increase our presence and give us opportunities to provide our quality service to more customers. We look forward to working with the management and employees of Star and Edison to ensure a smooth transition,” said John Strangfeld, chairman and CEO of Prudential Financial Inc.
In June 2010, the Japanese life insurance industry had 47 life insurance companies operating in the country, with the major players being: Alico Japan, ING, Manulife, Midori, Lifenet, SBI AXA Life, Japan Post (Kampo) and AIRIO. The Japanese life and non-life insurance industry is facing difficult times as, similar to the positions of Western Europe and North America, where the insurance market has matured with limited potential for writing new business, compounded by aging populations and declining numbers of younger inhabitants.
Insurance Companies Mentioned:
Prudential Financial Inc
Prudential Financial Inc. is a financial services leader, with approximately US$750 billion of assets under management as at September 2010. Prudential Financial operates in the United States, Europe, Latin American and Asia, with approximately 42,000 employees worldwide
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
AIG Star Life Insurance
AIG Star Life Insurance Co. Ltd. is involved in providing life insurance coverage and retirement pension plans to the individual and group policyholders.
AIG Edison Life Insurance
AIG Edison Life Insurance Company provides life insurance services in Japan. AIG Edison Life Insurance has 8,000 sales agents and 17 bancassurance partners in Japan. The company is also providing new distribution channels for AIG which includes, corporation, unions and government agencies
MetLife
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Alico
Alico provides a broad and innovative range of insurance and savings products to individual customers, corporate clients and high net worth customers. With products to support every aspect of their customers’ lives, and provide comprehensive cover for the employees and commercial needs of their business clients.
Oct
22
Global Insurers Exit Taiwan Insurance Market
Filed Under AIG, Insurance Company, Life Insurance, MetLife | 3 Comments
MassMutual has announced the intention to dispose of their 39 percent stake in joint venture company MassMutual Mercuries Life, which, if successful, will mean the exit of another global insurer from the Taiwanese insurance industry. MassMutual will follow in the foot-steps of other global insures in exiting a life market which is projected to remain volatile in the foreseeable future.
MassMutual has joined AIG and MetLife in attempting to exit the Taiwanese life insurance market, as business is adversely affected by poor financial returns and inadequate prospects. This strategy being partly due to historical policies negotiated at base interest rates which are no longer sustainable.
Compared to the insurance market in neighboring China – which has seen a significant increase in foreign investment in the insurance sector – the Taiwanese counterpart business is not seen as an attractive financial proposition. AIG, Metlife and MassMutal have all put their Taiwanese life insurance businesses up-for-sale in a move to exit a market which has been stagnant in recent years.
Current investors are deterred by a life market which has been struggling to achieve a reasonable financial return in recent years and which has a forecast of low returns in the future. This is combined with the stringent approach adopted by the insurance sector regulators – the Financial Supervisory Commission (FSC).
A forecast by rating agency Standard & Poor (S&P) in 2010 highlighted the difficult trading environment for the life insurance market in Taiwan and the challenging times ahead. The life-insurance market in Taiwan has remained sluggish and turbulent since the recent economic crisis and is inhibited by historic business secured at rates which are no longer profitable. While regional peers Thailand and Japan have seen profits and business growth return, the Taiwanese industry has been slow to recover from the 2007 – 2009 global economic downturn prompting some of the major life-insurers to re-evaluate their continued presence in the country.
An estimated total net worth of US$ 2.5 billion of Taiwanese based insurance assets are up-for-sale. The factors deterring current international insurers based in Taiwan is the lack of future growth opportunities, market volatility and strict accounting policies. Intervention by the Financial Supervisory Commission (FSC) – the Taiwanese regulators – has resulted in the potential sale of two life insurance business divestments – by Metlife and AIG – being blocked.
The sale of Metlife’s Taiwanese arm for US$116 million was blocked by the Taiwanese regulator. Waterland Financial placed a bid for this business in April 2010, which was subsequently blocked by the FSC in October 2010 on the grounds of disagreements among Waterland Financial shareholders and debt repayments plans.
The decision by the FSC to block the sale of the US-based MetLife business followed an earlier announcement that the America International Group (AIG) planned US$2.2 billion sale of its Taiwanese Nan Shan unit had been rejected by the regulators. Primus Financial Holdings Ltd saw their bid blocked for Nan Shan by the FSC on the grounds that it contravened Taiwan’s investment policies.
Following MetLife and AIG’s recent attempts to exit the Taiwanese insurance market, MassMutual is the latest global insurer to take steps to leave the life insurance sector in Taiwan. The US insurer has placed its 39 percent holding in joint venture MassMutual Mercuries Life for sale for an estimated US$97 million.
The trend for foreign insurers to withdraw from the insurance market in Taiwan in recent times is further reflected in global insurance players – Prudential, Aegon and the ING Group’s have all retreated from this market, which has experienced low growth in recent years. Nevertheless, insurer ACE Ltd has not been deterred by fellow counter-parts as they are in talks with New York Life to buy their Taiwanese branch.
Since the 2007 global financial crises took effect, international insurers have been evaluating business operations and repositioning activities worldwide to take advantage of developing and emerging growth markets and exiting sectors of business failing to deliver acceptable financial returns. These factors, combined with the Taiwanese authorities’ adoption of stricter accounting processes in the regulation of financial services in the country, have lead to actions by a number of the major players to seek withdrawal from the Taiwanese life insurance sector.
While global insurers are intent on exiting the Taiwanese insurance market – which is estimated to be worth US$52 billion and is the fourth largest in Asia – neighboring China and other emerging Asian markets have seen an increase in business activity in recent times benefiting from being able to initiate new business in line with current interest rates and projected growth predictions.
Insurance Companies Mentioned:
MassMutual
MassMutual Financial Group was established in 1895. MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyholders. Products include life , disability income, long term care and retirement insurance.
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
Prudential
Prudential has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
Nan Shan Life
Nan Shan Life Insurance Company, Ltd. was established in July 1963. After its restructuring in January 1970, Mr. K.K. Tse, the then Chairman of American International Underwriters, became the first Chairman of the company. In forty years, Nan Shan has become a super insurance company with the most professional management, the best operational performance, and a solid financial foundation. Its agency force has been recognized as the best in Taiwan’s life insurance industry.
MetLife
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Ace
The ACE Group is one of the world’s largest providers of commercial property and casualty insurance. With its core operating insurance companies rated A+ for financial strength by Standard & Poor’s and A.M. Best, and with nearly US$78 billion in assets and more than US$19 billion of gross written premiums in 2009, the ACE Group is distinguished by its underwriting expertise, superior claims handling and global franchise, and has a physical presence in 53 countries and commercial and individual customers in more than 170 countries.
Ageas
Ageas is an international insurance company with a heritage spanning more than 180 years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market. They are grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia. It is an undisputed leader in the Belgian market for individual life and employee benefits, as well as a leading non-life player, through AG Insurance. Internationally Ageas has a strong presence in the UK, where it is the third largest player in private car insurance. The company also has subsidiaries in France, Germany, Turkey, Ukraine and Hong Kong. Ageas has a track record in developing partnerships with strong financial institutions and key distributors in different markets around the world and successfully operates partnerships in Luxembourg, Italy, Portugal, China, Malaysia, India and Thailand.
ING
ING provides banking, investments, life insurance and retirement services and operates in more than 50 countries. It serves more than 85 million private, corporate and institutional customers in Europe, North and Latin America, Asia and Australia.
MassMutual Mercuries Life Insurance
MassMutual Financial Group entered the Taiwan market as an equal partner with Mercuries & Associates Ltd to from MassMutual Mercuries Life Insurance. In 2002, the company accumulated NT $ 64 billion in assets and made a post-tax profit of as much as NT $ 1.04 billion.
Aug
30
MetLife Gets Approval for ALICO, DelAm Takeover
Filed Under AIG, Insurance Company, Life Insurance, MetLife | 7 Comments
The European Commission has given its approval for MetLife’s purchase of AIG subsidiaries American Life Insurance Company (ALICO) and Delaware American Life Insurance Company (DelAm), as part of MetLife’s takeover of AIG’s international life insurance business.
MetLife’s purchase of ALICO and associated subsidiaries was agreed upon early in 2010, and the company recently obtained approval to purchase ALICO’s Hungary-based subsidiary, AHICO, from Hungary’s financial markets regulator, PSzÁF, in the beginning of August, 2010.
The European Commission was looking at whether or not MetLife’s takeover of the two companies, ALICO and DelAm, would negatively impact competition in European markets. DelAm is part of AIG’s international life insurance operations. The purchase of DelAm, which provides wealth management services, retirement planning, life insurance and health insurance to individuals as well as commercial and institutional clients was considered not to pose any concerns, especially considering it does not provide services in the EU.
ALICO, which provides life insurance, retirement planning, wealth management, accident insurance and health insurance to individual customers and corporate clients, was found to have some overlap in activities with MetLife by the commission. MetLife and ALICO did overlap in some life insurance products in a few EU Member markets, however the combined market share of MetLife and ALICO in these markets would still be relatively small and the combined company would still face strong competition from other credible companies in the marketplace.
After MetLife’s acquisition of ALICO, it is expected that MetLife will be in a top-five position in many emerging markets, including those in central and eastern Europe, Latin America and the Middle East. MetLife is hoping to wrap up the deal with AIG by the end of 2010.
Insurance Companies Mentioned:
AIG
American International Group, Inc. (AIG), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG’s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Paris and Tokyo.
ALICO
The American Life Insurance Company, generally known as Alico, provides a broad and innovative range of insurance and savings products to individual customers, corporate clients and high net worth customers. With a wide range of products to support every aspect of their customers’ lives, and provide comprehensive cover for the employees and commercial needs of their business clients. Their products include; health insurance, life insurance, savings plans, accident insurance, retirement planning and travel insurance among others.
DelAm
Delaware American Life Insurance Company, or DelAm, participates in the accident, life and health insurance business, writing accidental death and dismemberment, group life, long term disability, dental, and medical business as part of AIG’s international life insurance sales operations. It was incorporated in 1964 and is based in Houston, Texas; it is a subsidiary of AIG.
MetLife Inc.
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Aug
9
MetLife Receives Regulatory Approval for Takeover of Hungarian ALICO Subsidiary
Filed Under Insurance Company, Life Insurance, MetLife | 1 Comment
In part of its pending takeover of ALICO, MetLife has been given regulatory approval for the purchase of ALICO’s local, wholly-owned subsidiary AHICO.
The regulatory approval for transfer of AHICO is part of the deal between AIG and MetLife Inc., which will see MetLife buy AIG’s international life insurance business, American Life Insurance Company (ALICO) for USD 15.5 billion (EUR 11.7 billion).
The purchasing price is comprised of USD 6.8 billion (EUR 5.1 billion) in cash and USD 8.7 billion (EUR 6.5 billion) in equity, including common stock, contingent convertible preferred stock and equity units. The transfer of equity from MetLife to AIG for the purchase of ALICO gives AIG a 20 percent stake in MetLife, once the equity units convert to common stock 3 years after the deal is closed.
First American-Hungarian Life Insurance Company (AHICO) was the 100 percent wholly owned subsidiary of ALICO, set up in 1990 to serve the local Hungarian market. After getting approval from the Hungarian financial markets regulator PSzÁF, AHICO can begin on the transfer of ownership to MetLife.
Despite the change in ownership, there are no foreseeable alterations to AHICO’s business. The takeover by MetLife will not affect AHICO’s tax registration, claims settlement procedures, or any insurance policies in force, other than the fact that AHICO will become part of a larger international business network spanning 60 countries, business will continue as usual.
Insurance Companies Mentioned:
AIG
American International Group, Inc. (AIG), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG’s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Paris and Tokyo.
ALICO
The American Life Insurance Company, generally known as Alico, provides a broad and innovative range of insurance and savings products to individual customers, corporate clients and high net worth customers. With a wide range of products to support every aspect of their customers’ lives, and provide comprehensive cover for the employees and commercial needs of their business clients. Their products include; health insurance, life insurance, savings plans, accident insurance, retirement planning and travel insurance among others.
AHICO
AHICO First American-Hungarian Insurance Company was 100 percent owned by ALICO, prior to the buyout of ALICO by MetLife Inc. AHICO was established in Hungary in December 1990, and has a registered capital of HUF 1 billion (USD 4.7 million).
MetLife Inc.
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Aug
3
MetLife Selling More Equity than Originally Planned for Alico Deal
Filed Under Health Insurance, Insurance Company, Life Insurance, Medical Insurance, MetLife | 9 Comments
American Insurer, MetLife Inc., will have to raise the amount of equity it is selling to finance its purchase of AIG’s international insurance subsidiary, American Life Insurance Company (Alico), which it announced in March.
The sale of Alico to MetLife Inc. for about USD 15.5 billion, comprised of USD 8.7 billion in equity and USD 6.8 billion in cash. MetLife originally planned on purchasing Alico by selling USD 3.1 billion in debt, and USD 2 billion in equity through the sale of shares to help finance the cash portion of the deal. The USD 8.7 billion in equity would have been covered by issuing that value of equity securities to AIG, which would be dependent on minimum holding periods.
However, MetLife announced on Monday that it will issue 75 million shares of common stock to help finance the cash part of the Alico deal, increasing the value of shares sold to USD 3 billion. This 50% increase in value over the originally planned USD 2 billion equity offering, means that MetLife will be spending less cash in hand to finance the deal.
MetLife originally estimated that operating earnings for the year after the purchase would increase by USD 0.45-0.55 per share. After the newest development, estimations have been revised down to a USD 0.40-0.45 increase in operating earnings per share after the purchase of Alico.
Insurance Companies Mentioned:
AIG
American International Group, Inc. (AIG), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG’s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Paris and Tokyo.
Alico
The American Life Insurance Company, generally known as Alico, provides a broad and innovative range of insurance and savings products to individual customers, corporate clients and high net worth customers. With a wide range of products to support every aspect of their customers’ lives, and provide comprehensive cover for the employees and commercial needs of their business clients. Their products include; health insurance, life insurance, savings plans, accident insurance, retirement planning and travel insurance among others.
MetLife
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Jul
26
United MetLife – Opens New Sichuan Branch
Filed Under China, China insurance, Health Insurance, Insurance Company, International Healthcare, MetLife | 1 Comment
MetLife announces the opening of its third Provincial branch in Sichuan. The unveiling of the new Sichuan branch is the first since United Metlife disclosed its plans to merge with Sino-US MetLife insurance business.
The planned merger between United MetLife and its Sino-US MetLife Insurance Company Limited is the first sign that MetLife is preparing for the two MetLife subsidiary’s to amalgamate; this follows the announcement by the China Insurance Regulatory Commission (CIRC) that foreign investors should only have one insurance operation on the mainland.
The Beijing based Sino-US MetLife insurance subsidiary planned merger with the Shanghai based United MetLife – creating Sino-US United MetLife Insurance – will ensure that MetLife follows the Chinese Authorities guidelines for foreign insurance investors in China.
In order for MetLife to meet its obligations – to become a single operating insurance provider in China – requires Capital Airport Holding to sell its 50% stake in Sino-US MetLife to Shanghai Alliance Investment which is MetLife’s JV partner in United MetLife.
Mr Marks, head of the Asia-Pacific region for MetLife said “China is a key strategic market for MetLife. By having a single partner across the country we can create a stronger brand and portfolio of offerings for the market. This will allow us to accelerate growth and in turn provide increased value to our customers.”
The opening of the new branch in the Sichuan province – together with the Chongqing branch – means MetLife continues to build the foundations in second-tier cities in western China, expanding its presence in the country; this has been a key focus for MetLife in recent years.
Sino-US MetLife Insurance Company Limited provides life, accident and health insurance to individuals in Beijing, Chongqing, Guangzhou, Shenzhen, Sheyang and Dalian. While United MetLife Insurance Company Limited offers life and accidental insurance products in Shanghai, Nanjing, Hangzhou, Ningbo and Wuxi.
The announcement of the Sichuan province branch comes at a time for MetLife when foreign investors in China, aim to strengthen their presence in this prosperous country. The growing demand for insurance products – to cover accident and health in China – is a key revenue stream for MetLife since they acquired the American Life Insurance Company.
The Asian insurance industry – especially China – has been transformed in recent years, with foreign investors competing for a percentage of this profitable market. MetLife’s activities in China was estimated to generated Yuan 3 billion (US$442 billion) in 2009 – a figure accounting for less than 1% of the Chinese insurance market.
Insurance company mentioned:
MetLife
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Apr
30
MetLife Q1 Operating Profit Soars
Filed Under Insurance Company, MetLife | 1 Comment
The first quarter operating earnings recently reported by MetLife Inc. reached levels that beat the expectations of analysts in Wall Street, chiefly aided by an increase in investment income produced by the thawing credit markets.
Compared to a year ago, the net investment income grew by 31 percent, from US$3.3 billion (EUR 2.5 billion) to US$4.3 billion (EUR 3.26 billion).
Other contributing factors to the strong results are the 12 percent increase in premium and fee revenue, an 8 percent increase in annuity sales, together with cost reductions, which combined produced a 17 percent increase in operating revenue for the quarter ended 31 March 2010.
The operating profit for MetLife in Q1 grew more than 500 percent compared to the same period last year, when the financial tsunami was destroying most investment income. The US$834 million (EUR 631.82 million) operating profit reported for Q1 2010 is more than six times the amount reported for Q1 2009 of US$131 million (EUR 99.24 million).
This better-than-expected Q1 results achieved through improved business both in the US and Internationally position MetLife positively for continued growth during the rest of 2010.
Insurance Company mentioned:
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Apr
29
ALGICO ceases underwriting new casualty and property policies
Filed Under AIG, Health Insurance, Income Protection, Insurance Company, Life Insurance, Medical Insurance, MetLife | 1 Comment
Member of the American International Group (AIG), American Life and General Insurance Company (ALGICO) will no longer underwrite new casualty and property insurance policies in Trinidad and Tobago as of May 1, 2010.
The decision to stop issuing new policies comes as a result of AIG subsidiary ALICO’s sale to MetLife, which is part of AIG’s global restructuring plan to pay back the American government for the US$ 182 billion bailout in 2008. Alico is the majority stakeholder in American General and Life Insurance Company and in light of the impending sale to MetLife, AIG, Alico and ALGICO deliberated over the fate of ALGICO’s property and casualty insurance business, finally coming to the decision to no longer underwrite policies.
ALGICO says that all policies already in force are perfectly safe and says that claims will continue to be processed in the usual manner. ALGICO has informed the Central Bank of Trinidad and Tobago, as well as the Banking, Insurance and General Workers Union (BIGWU) of the change, and is in the middle of notifying policyholders, brokers, agents and shareholders of the decision. As a result of the decision, an unknown number of employees are to be laid off from ALGICO, which is in contact with BIGWU in order to organize appropriate severance packages for their outgoing employees.
ALGICO will continue its other lines of business, including writing and renewing life, accident, annuities and health insurance for individuals as well as group health, life and pension plans. As part of the integration of Alico into MetLife, ALGICO is planning to increase the number of life insurance products it offers and broaden its distribution channels in an effort to concentrate on life and retirement products where MetLife is an industry leader.
Companies Mentioned:
AIG
American International Group, Inc. (AIG), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG’s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Paris and Tokyo.
Alico
Alico provides a broad and innovative range of insurance and savings products to individual customers, corporate clients and high net worth customers. With products to support every aspect of their customers’ lives, and provide comprehensive cover for the employees and commercial needs of their business clients.
ALGICO
American Life and General Insurance Company (Trinidad and Tobago) Limited was incorporated in Trinidad and Tobago in 1977 to assume combined control of Alico’s local life insurance portfolio as well as American International Underwriters’ general insurance business. The company is a member of the American International Group and has an asset base of US$ 1 billion.
MetLife Inc.
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Mar
26
MetLife planning to Cover the Middle East
Filed Under AIG, Expat Insurance, Insurance Company, Life Insurance, MetLife, Middle East, UAE Insurance | 2 Comments
Following its acquisition of American Life Company (ALICO), MetLife now aims to become a force in the Middle East, which had been missing from its portfolio of 18 countries.
Given that the growth of life insurance sales is happening outside of the US, and ALICO has been in an excellent position to strategically capitalise this segment of the market in Asia, it is only natural for MetLife to take advantage of this opportunity to extend its cover to the Middle East.
Insurers are particularly drawn by the fact that the Middle East is currently under-insured in a severe manner. In developed countries premiums reach about 15 percent of their GDP whilst per-capita premiums in the Gulf account for an average of only 1 per cent of GDP, and it is estimated that insurance premiums grew 28 percent last year.
This calling has brought 58 insurers to the UAE, with approximately half of them being foreign companies. This intense competition has driven down premiums to some of the lowest levels in the world.
Within the particularly undeveloped segment of personal insurance, car insurance and health insurance are the most common products, especially since regulators have started to gradually make them compulsory. Life insurance, the core business of MetLife and ALICO is an even newer concept in this market.
Whilst awaiting regulatory approval for its ALICO purchase, MetLife plans the integration of the two companies and continue watching the markets for opportunities. MetLife hopes to close the deal by 01 November of this year.
Actively present in 55 countries with a 20-million customer base, the presence of ALICO in the Middle East and Japan complements activities of MetLife in China, India and Brazil. MetLife counts with a 70-million customer base.
The success story of ALICO made it one of the crown jewels of AIG, before being bailed out by the US government.
Insurance Companies mentioned:
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Alico provides a broad and innovative range of insurance and savings products to individual customers, corporate clients and high net worth customers. With products to support every aspect of their customers’ lives, and provide comprehensive cover for the employees and commercial needs of their business clients.
Mar
17
AIA and Alico sales herald a New Life Insurance Market Era in Asia
Filed Under AIG, Life Insurance, MetLife | 5 Comments
Once the ink dries on the deals for AIG to divest American Life Company (ALICO) and American International Assurance Company (AIA), there will be a stakeholders shift in the Life Market in Asia, as observed by market analysts.
Since the effects of the global financial crisis started to be felt over a year ago, there has been a transformation of the insurance markets in Asia, with the sale of American Life Insurance Company to MetLife Inc. and the purchase of AIA Group by Prudential plc becoming the most recent adjustments in the Asian markets.
It is envisioned that the acquisition of Alico by MetLife in Japan will bring about a refreshed competitive environment for both local and foreign players in the Japanese life insurance market. This latest deal by MetLife together with the IPO next month of Dai-ichi Life’s stock may exercise some pressure to the leading life insurers such as Nippon Life Insurance Co. Ltd., Sumitomo Life Insurance Co. and Meiji Yasuda Life Insurance Co. to consider their strategic alternatives.
The combination of MetLife and Alico in Japan is likely to produce innovative life products that meet the demands for savings and long-term care for their ageing population and transitioning demographic. Foreign players entering the Japanese market are well positioned to introduce new savings products, something that the local insurers must factor in whilst drafting their new competitive strategies.
In general, the competitive landscape of the Asian insurance market has been altered by the financial tsunami. One of the noticed effects in the Japanese market is that local insurers have gained a larger share at the expense of the portion of business held by foreign insurers disposing of their Asian operations, as exemplified by the acquisition made by MetLife. Likewise, Prudential is now well positioned to gain market share in the rest of Asia, following the acquisition of AIA.
Increased global reach will be another positive impact for MetLife, increasing its presence from 17 to 64 countries as a result of its Alico acquisition. MetLife move into the top-five tier in many emerging markets including Latin America, the Middle East, Central and Eastern Europe among others.
The integration of Alico into MetLife is scheduled for completion towards the end of this year. The majority of employees currently working for Alico will be retained, in favour of a smooth integration process into MetLife.
Insurance Companies mentioned:
American International Group, Inc. (AIG), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG’s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Paris and Tokyo.
AIA is a Hong Kong-based life insurance company doing business across Asia that has been in business since 1919. They service over 20 million policies through 23,000 employees and 300,000 agents throughout markets in Asia, including; Vietnam, Thailand, Taiwan, South Korea, Singapore, Philippines, New Zealand, Malaysia, Macau, Indonesia, India, Hong Kong, Mainland China, Brunei and Australia.
Alico provides a broad and innovative range of insurance and savings products to individual customers, corporate clients and high net worth customers. With products to support every aspect of their customers’ lives, and provide comprehensive cover for the employees and commercial needs of their business clients.
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Prudential has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
Feb
3
American International Group to sell American Life Insurance Company
Filed Under AIG, Insurance Company, International Healthcare, Life Insurance, MetLife | 20 Comments
American International Group Inc. has confirmed on Tuesday that it is in talks with MetLife Inc. to sell the groups’ life insurance unit, the American Life Insurance Company. Rumors surfaced last month with regards to a potential MetLife deal for the AIG unit, and market analysts speculated that such a move would be incredibly beneficial to MetLife as the American Life Insurance Company has an extensive international health and life insurance business operating in more than 50 countries around the world.
Despite the discussions around the American Life Insurance Company, AIG has stipulated that it will not consider the sale of two Japanese life insurance companies which it took off the market in 2009. Star Life Insurance Co. and AIG Edison Life Insurance Co. were up for sale following the turning of AIG’s fortunes in 2008 at the peak of the global financial crisis, but had been removed from the market by the fourth quarter of 2009.
With a number of global insurance providers supposedly in position to increase their international reach through acquisitions, some analysts have speculated that AIG may be willing to play in a competitive market. However, AIG spokesman Mark Herr stated of both Star Life and AIG Edison that “they are good businesses and we are pleased to have them in the AIG family.”
The move for MetLife to buy the AIG unit may have its roots in the sharp loss of profits experienced by MetLife in the fourth quarter of 2009. MetLife has stated that the company’s profit dropped by approximately 70% as it paid out more benefits and claims.
Insurance Companies Mentioned:
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
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