This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Life Insurers May Have Solid Second Quarter: Analysts

NEW YORK ( TheStreet)-- Analysts expect life insurers to report solid second quarter results after most insurance companies reported stronger than expected earnings for the first quarter.

Life insurers are seeing the benefits from a five percent increase in the S&P 500, stable interest rates and sales volumes that are steadily increasing, said UBS (UBS) analyst Andrew Kligerman.

In the first quarter life insurers saw benefits in both the annuity space and international operations, especially those insurers who recently acquired international operations in Japan such as MetLife (MET) and Prudential (PRU), said Joel Levine an analyst at Moody's (MCO) .

MetLife reported a net profit of $830 million compared with a profit of $805 million in 2010. Sales from Alico were up $1.1 billion in the first quarter due, with 45 per cent of the sales in Japan, according to their first quarter earnings report.

Meanwhile, Prudential reported a net profit of $589 million compared to a 2010 profit of $536 million. The insurer reported that operating income increased by $72 million with an estimated contribution of $34 million from the operations of the Star and Edison businesses acquired from American International Group (AIG).

"Operating fundamentals were better overall and things have stabilized in the low interest rate environment, which shows that life insurers are going to have a healthy 2011 and 2012," said Sandler O'Neill analyst Edward Shields.

"I thought Prudential had a particularly robust quarter because of their sales growth in Asia," said Kligerman, who recommends Prudential's stock because they said they have $2.2 to $2.7 billion in immediately deployable capital, which could be used for dividends, share repurchases and even small acquisitions.

"The Hartford (HIG) also had a good quarter, and the stock rallied on the results because they are on track for a 12 percent ROE by 2012," said Kligerman, who has a, "buy" on the stock. He adds that the insurer has had better credit performance in its investment portfolio. The Hartford reported a first quarter net income of $511 million compared to $319 million in the first quarter of 2010.

Shields said Alfac (AFL) is his top, "buy" at the moment because he does not see Aflac sales as being hit dramatically by the earthquake and tsunami in Japan. The insurer reported net earnings of $395 million compared to $636 million in 2010. Aflac's results included a total of $37 million in claims related to the earthquake and tsunami that struck Japan on March 11.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs