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Sean Millard

Disclosure: I am in full compliance with all ethics and other policies for Market Realist research analysts. I am not invested in securities that I cover on Market Realist.

More From Sean Millard

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    Macroeconomic Analysis

    Leading Players in the US Annuity Industry

    The market leader in the fixed annuity industry is Allianz Life Insurance Company of North America with 13% market share, followed by New York Life with 8%.

    By Sean Millard
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    Earnings Report

    AIG’s Commercial Insurance segment sees increased income

    AIG’s top line dipped marginally in 4Q14 when compared to 4Q13, driven by disciplined sales and underwriting in casualty products in commercial P&C.

    By Sean Millard
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    Earnings Report

    AIG improves its capital structure in 4Q14

    AIG repurchased $6.5 billion of high coupon debt, replacing it with lower coupon debt to help AIG reduce its interest burden by ~$249 million per year.

    By Sean Millard
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    Earnings Report

    Gauging AIG’s stock performance and valuation

    AIG’s shares appear to be currently undervalued despite the improvements in its operating and financial metrics.

    By Sean Millard
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    Financials

    How insurers manage their capital requirements

    A company managing higher risk products must maintain a higher level of minimum capital compared to a company with a relatively lower level of risk.

    By Sean Millard
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    Financials

    What impacts an insurer’s profits?

    In 2013, the top ten life and health insurance companies had just above 50% market share in terms of direct premiums written.

    By Sean Millard
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    Basic Materials

    Underwriting profit: First leg of the profit machine

    An underwriting loss is not unusual for an insurance company. In a soft pricing environment, pricing of P&C products is low due to intense competition.

    By Sean Millard
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    Consumer

    How cost structures and distribution channels impact profit

    As customers use Internet-based aggregators to purchase insurance policies, insurers use online sales to interact directly with customers and reduce costs.

    By Sean Millard
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    Energy & Utilities

    How investment income drives profit

    The impact of interest rate movements is lower in the P&C segment, as their products can be repriced annually to keep in line with interest rate movements.

    By Sean Millard
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    Energy & Utilities

    How key drivers impact insurance sales

    For P&C insurers such as AIG and ACE, various mandatory requirements may drive sales of vehicle, workers’ compensation, and homeowners insurance.

    By Sean Millard
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    Consumer

    An insurer’s investments: Dominated by debt securities

    A large portion of an insurer’s balance sheet contains lower-risk assets such as government bonds and high-grade corporate bonds.

    By Sean Millard
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    Financials

    The US insurance industry: Largest in the world

    Insurance premiums have grown at a modest pace after a dip in 2009 due to the financial crisis, which the industry was able to navigate.

    By Sean Millard
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    Energy & Utilities

    Life insurance, P&C insurance, and reinsurance

    P&C products have commoditized characteristics, resulting in sharp competition in the market and business cycles. AIG and ACE are key players in this space.

    By Sean Millard
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    Financials

    Making sense of an insurer’s liabilities

    Policyholder liabilities, or policyholder reserves, represent the future claims that may arise for the pool of policies the insurer writes.

    By Sean Millard
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    Financials

    How valuation of insurance companies works

    Financial market movements not only impact income from invested assets, but also the value of assets carried at fair value on an insurer’s balance sheet.

    By Sean Millard
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    Financials

    How insurers are targeting new growth avenues

    US insurance M&A activity picked up in 2014 after a two-year dip, as insurers try to capture growth opportunities in domestic and foreign markets.

    By Sean Millard
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    Financials

    Why should you invest in insurance ETFs?

    Insurance ETFs are poised to gain from industry growth. As interest rates improve, insurers should see better earnings due to higher investment returns.

    By Sean Millard
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    Macroeconomic Analysis

    Reinsurers See Consistent Growth in Capital

    When a large number of claims arises due to a catastrophe loss, insurers face a strain on capital. Then, reinsurers may bear a portion of the burden.

    By Sean Millard
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    Company & Industry Overviews

    Prudential Financial Declared a G-SIFI

    The G-SIFI designation was created to address the problem of “too-big-to-fail” financial institutions in the wake of the 2008 credit crisis.

    By Sean Millard
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    Company & Industry Overviews

    Gauging Prudential Financial’s Valuation

    Among its peers, Prudential remains in the middle of the valuation range, with companies like MetLife and Lincoln Financial showing a lower multiple.

    By Sean Millard
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    Company & Industry Overviews

    A Closer Look at Prudential Financial’s Share Price Performance

    Life insurers have underperformed the market due to negative news regarding macroeconomic situations, low interest rates, and regulatory uncertainties.

    By Sean Millard
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    Company & Industry Overviews

    Prudential Financial Enjoys Strong Solvency Ratios

    Prudential has comfortable solvency positions in its subsidiaries. In the US, Prudential Insurance’s solvency ratio was well above the target ratio of 400%.

    By Sean Millard
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    Company & Industry Overviews

    A Closer Look at Prudential Financial’s Capital Structure

    Prudential reported a capital capacity of ~$2 billion at the end of 2014, which is net of another ~$2 billion capital that it earmarked for debt reduction.

    By Sean Millard
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    Company & Industry Overviews

    Prudential’s International Business Sees Strong Profitability

    Prudential’s International Insurance business saw improved profitability after the acquisition of AIG Star and AIG Edison in 2011.

    By Sean Millard
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    Company & Industry Overviews

    Stable Top-Line Evolution in Prudential’s International Business

    Prudential’s third-party distribution channels provide access to a larger customer base, supplementing its captive distribution channels.

    By Sean Millard
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    Company & Industry Overviews

    Japan: An Attractive Insurance Market for Prudential Financial

    Since the Japanese market is mature and characterized by competitive pricing, Prudential competes in this market through customer service and distribution.

    By Sean Millard
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    Company & Industry Overviews

    Prudential Financial Grows Its Assets Under Management

    Prudential’s third-party assets managed on behalf of its customers increased by $35 billion, out of which $5 billion resulted from positive net inflows.

    By Sean Millard
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    Macroeconomic Analysis

    February 2015 Catastrophe Losses

    February 2015 catastrophe losses came about due to winter weather, floods, and storms.

    By Sean Millard
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    Macroeconomic Analysis

    A Closer Look at the Costliest Catastrophes

    Hurricanes Sandy, Ike, and Andrew remain near the top of the list of the costliest catastrophes in terms of insured losses.

    By Sean Millard
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    Macroeconomic Analysis

    Making Sense of Economic and Insured Losses

    Insured losses are the ones that impact the profitability of insurance companies.

    By Sean Millard
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    Macroeconomic Analysis

    Fixed Annuity Sales Driven by Indexed Products in 2014

    Sales for fixed annuities were higher in the second half of 2013. On an annual basis, fixed annuity sales increased more than 13% in 2014 compared to 2013.

    By Sean Millard
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    Company & Industry Overviews

    Acquisitions Drive Growth in Prudential’s International Business

    Setting up business operations in fast-growing emerging markets remains a key trend among insurers who primarily operate in mature markets.

    By Sean Millard
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    Macroeconomic Analysis

    Variable Annuity Sales Lower in 2014

    Compared to 2013, variable annuity sales were down by ~3.6% in 2014, at around $140 billion, despite a strong performance in the equity markets.

    By Sean Millard
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    Company & Industry Overviews

    Prudential Financial Leads the Pension Risk Transfer Market

    In November 2012, GM entered into a deal with Prudential to transfer its pension liabilities and assets, exceeding $25 billion.

    By Sean Millard
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    Macroeconomic Analysis

    How Catastrophes Impact a P&C Insurer’s Combined Ratio

    The percentage points for catastrophe losses in the combined ratio have increased in recent years.

    By Sean Millard
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    Macroeconomic Analysis

    Catastrophe Losses and Profitability of P&C Insurers

    Catastrophe losses are one of the key risks to P&C insurers because these losses negatively impact profitability and capital.

    By Sean Millard
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    Company & Industry Overviews

    Prudential Financial’s Retirement Business Sees Consistent Growth

    Prudential’s Retirement business in the United States provides corporate customers with retirement savings and income-oriented products and services.

    By Sean Millard
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    Company & Industry Overviews

    Prudential’s Individual Annuities Show Improving Profitability

    Disciplined sales and diversification in its product mix has helped Prudential improve its return on assets from ~0.4% in 2009 to the current ~1% ROA.

    By Sean Millard
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    Company & Industry Overviews

    Prudential Financial’s US Distribution Network

    Prudential’s customer base includes over 30 million individual customers and 25,000 corporate clients, consisting of more than half of the Fortune 500 list.

    By Sean Millard
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    Company & Industry Overviews

    Prudential Financial is a Leading Life Insurer in the US

    The US is Prudential’s most important market, contributing over 60% of the company’s pre-tax adjusted operating income and ~50% share of its equity in 2014.

    By Sean Millard
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    Earnings Report

    Low yields impact AIG’s life insurance business earnings

    Pre-tax operating income of AIG’s Consumer Life Insurance segment stood at $80 million in 4Q14, compared to $215 million in 4Q13.

    By Sean Millard
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    Macroeconomic Analysis

    Higher Premium Rates in Personal Auto and Home Insurance Lines

    Auto insurance and homeowner’s insurance form two important product types of the personal lines business.

    By Sean Millard
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    Earnings Report

    AIG’s commercial P&C business sees improved underwriting results

    The combined ratio of AIG’s commercial P&C business improved in 4Q14, when compared with the 4Q13 ratio.

    By Sean Millard
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    Macroeconomic Analysis

    Personal Lines Rates Were Up 2% in February

    The US personal lines businesses have seen improved profitability from the 2011 levels.

    By Sean Millard
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    Macroeconomic Analysis

    How Underwriting Cycles Impact the Top Line and the Bottom Line

    The underwriting cycle moves between hard and soft market conditions, which have different sets of characteristics that determine the profitability of the insurance industry.

    By Sean Millard
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    Macroeconomic Analysis

    The Underwriting Profits of a Property and Casualty Insurer

    The property and casualty insurance business is cyclical in nature. The underwriting cycle alternates between two phases: the hard market and the soft market.

    By Sean Millard
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    Company & Industry Overviews

    MetLife is designated as a G-SIFI

    A G-SII must also fulfill higher loss absorbency requirements for activities that are nontraditional and noninsurance in nature.

    By Sean Millard
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    Earnings Report

    Reserve strengthening impacted AIG’s earnings negatively in 4Q14

    In 4Q14, AIG’s operating income after tax was impacted by a charge of more than $500 million for reserve strengthening and other estimate changes.

    By Sean Millard
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    Earnings Report

    AIG delivers on its financial objectives

    AIG’s financial objectives focus on profitability improvement, expense management, and balance sheet growth, achieving a sustainable ROE.

    By Sean Millard
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    Earnings Report

    AIG’s net income down in 4Q14, insurance operations earnings flat

    AIG reported a net income dip from $2.0 billion in 4Q13 to $655 million in 4Q14, due to an after-tax charge of ~$800 million for debt retirement activities.

    By Sean Millard
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    Company & Industry Overviews

    MetLife’s emerging market strategy fostering growth

    From 2011–2013, MetLife’s emerging market businesses saw 11% cumulative annual growth rate in operating earnings. EMEA’s growth rate was 16.1%.

    By Sean Millard
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    Company & Industry Overviews

    MetLife develops its employee benefits business across the globe

    Latin America is a major contributor to MetLife’s business unit, with nearly half the revenue. EMEA follows, with a share of revenues of ~40% in 2013.

    By Sean Millard
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    Company & Industry Overviews

    MetLife is delivering well in the strategy front

    MetLife targeted $1 billion in expense savings, which the company is on track to achieve in 2015. Cumulative expense savings in 2014 exceeded $910 million.

    By Sean Millard
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    Company & Industry Overviews

    MetLife’s well-diversified EMEA business

    MetLife has exposure to many currencies, particularly the euro, the Polish zloty, and the Russian ruble, which diversifies its foreign exchange exposure.

    By Sean Millard
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    Company & Industry Overviews

    MetLife’s Asia business show growth prospects

    Contributing ~20% to the group’s operating earnings, the Asia business segment remains a key profit driver of MetLife.

    By Sean Millard
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    Company & Industry Overviews

    MetLife is the largest player in Latin America

    MetLife plans to grow its retail and group business in Latin America, capitalizing on the growing middle class, affluent class, and corporate needs.

    By Sean Millard
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    Company & Industry Overviews

    Growth in MetLife’s Corporate Benefit Funding segment

    MetLife gained 45% of the $3.8 billion pension closeout market in 2013. The company expects the closeout market to maintain its robustness in the near term.

    By Sean Millard
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    Company & Industry Overviews

    MetLife is a key player in the US group insurance business

    MetLife is the market leader in the Large market with ~30% of the market share, while its market share is slightly above 5% in the Middle market.

    By Sean Millard
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    Company & Industry Overviews

    MetLife’s US Retail business becomes a profitable franchise

    MetLife is working to develop direct sales channels, which would reduce the share of agent commissions in operating costs.

    By Sean Millard
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    Company & Industry Overviews

    MetLife is a leading player in the US insurance industry

    MetLife intends to grow its retail business and expects low single-digit growth in the long term.

    By Sean Millard
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    Company & Industry Overviews

    MetLife’s valuation is close to historical mean

    Over the last four years, MetLife’s price ranged between 0.5x–1.0x its book value per share. Its current price-to-book value multiple is ~0.8x.

    By Sean Millard
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    Company & Industry Overviews

    MetLife pays consistent dividends

    After several years of flat dividends (74 cents per share on an annual basis), MetLife increased its payout in 2Q13, as well as in the same quarter of 2014.

    By Sean Millard
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    Company & Industry Overviews

    MetLife’s return on equity within target range

    MetLife’s return on equity evolution shows recovery from 2008–2009 levels, although it has yet to reach that of the pre-crisis periods.

    By Sean Millard
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    Company & Industry Overviews

    MetLife’s acquisitions deliver growth

    MetLife purchased Alico from AIG in 2010, helping MetLife gain exposure to emerging economies where Alico was already operating.

    By Sean Millard
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    Company & Industry Overviews

    MetLife – A globally diversified insurance company

    MetLife is a market leader in the US and the largest life insurer in Mexico and Chile. It is among the leading players in Japan, Korea, and Poland.

    By Sean Millard
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