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Health Care and Utilities Sectors: Best Performers on November 29
The health care sector rose 0.65% on November 29. Alexion Pharm (ALXN) (+5.2%) and Centene (CNC) (+3.9%) are the top performers.
What Led to Chubb’s Discounted Valuations?
Chubb has been successful in gaining investors’ confidence as the company rewarded shareholders with $667 million in 2Q17 via repurchases and dividends.
AIG Posted a Huge Loss in 4Q17
AIG (AIG) reported a net loss of $6.66 billion in 4Q17—compared to a loss of $3 billion in 4Q16.
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.
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.
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.
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.
Goldman Sachs: Trade War Boosts Risk of Recession
Goldman Sachs (GS) has cut its Q4 growth forecast by 20 basis points. It now foresees the trade war impacting growth more than it previously forecast.
How Analysts Are Rating Chubb
Chubb (CB) is tracked by 18 analysts in February 2018. One analyst has recommended a “sell” for the stock, and one has recommended a “hold.”
Understanding Chubb’s Premium Valuations
Chubb’s (CB) PE (price-to-earnings) ratio is 14.37x on an NTM (next 12-month) basis. The average for its competitors was 13.36x.
Here’s What’s behind Chubb’s Net Income in 4Q17
Chubb’s (CB) net income in 4Q17 was $1.5 billion compared to $1.6 billion in 4Q16. It saw a rise in net premiums earned, from $7.1 billion in 4Q16 to $7.2 billion in 4Q17.
Understanding the Performance of MetLife’s Holdings Division
MetLife’s (MET) holdings division saw a substantial rise in its operating earnings from $500 million in the first nine months of 2016 to $1.0 billion in the first nine months of 2017.
How Will MET’s Property and Casualty, Asia Businesses Fare?
MetLife’s (MET) property and casualty (or P&C) business is expected to show an upward trend in 2018.
Insurance Claims Dent Berkshire’s Profitability in 2017
Berkshire Hathaway (BRK.B) reported losses before tax of $963 million in 3Q17 compared to earnings before taxes of $1.4 billion in the corresponding period last year.
How AIG’s Valuation Compares after 3Q17
Discounted valuation American International Group (AIG) has a one-year forward price-to-earnings ratio of 20.4x, whereas its peers’ average ratio is 21.0x. National General Holdings (NGHC), Allstate (ALL), and Arch Capital Group (ACGL) have ratios of 18.8x, 15.1x, and 29.2x, respectively. AIG’s lower valuation is mainly due its significant catastrophe losses of $3 billion in 3Q17 and its […]
The Impact of Hurricanes on AIG’s Personal Insurance Division
Higher losses American International Group’s (AIG) personal insurance division saw catastrophe losses of $297 million in 3Q17, compared with $27 million in 3Q16. The substantial rise in losses was mainly due to windstorm and hailstorm losses, which stood at $206 million in 3Q17 and $26 million in 3Q16. Over the last 12 months, AIG has had a […]
Net Investment Income Rises for AIG’s Group Retirement Division
Net investment income and premiums American International Group’s (AIG) group retirement division saw its premiums fall marginally to $8 million in 3Q17 from $9 million in 3Q16. The division’s net investment income fell 5% from $554 million in 3Q16 to $524 million in 3Q17. This fall was mainly due to lower income from alternative investments. Whereas AIG […]
A Look at AIG’s Individual Retirement Business
Assets under administration and premiums American International Group’s (AIG) individual retirement business saw its premiums fall 41% to $22 million in 3Q17 from $37 million in 3Q16. In 3Q17, the division’s assets under administration stood at $147.8 billion, due to positive equity markets and a favorable net flow related to index annuities. Whereas AIG has an enterprise value […]
How AIG’s Consumer Insurance Division Performed in 3Q17
Marginal fall American International Group’s (AIG) consumer insurance division’s total operating revenue fell 1% from $6 billion in 3Q16 to $5.9 billion in 3Q17. The marginal fall was mainly due to lower net investment income and premiums. The division’s premiums fell 2% to $3.2 billion in 3Q17 from $3.3 billion in 3Q16. Whereas AIG has a beta of […]
AIG’s Commercial Insurance Division Sees Catastrophe Losses
Total operating revenue In 3Q17, American International Group’s (AIG) commercial insurance division’s total operating revenue comprised net investment income and premiums. In 3Q17, AIG’s commercial insurance division’s total operating revenue fell to $4.6 billion from $5.4 billion in 3Q16, a 15% fall. This fall was mainly due to premiums falling 15%, from $4.5 billion in 3Q16 […]
American International Group’s Total Expenses Rise in 3Q17
Total expenses rise American International Group’s (AIG) total benefits, losses, and expenses rose a substantial 20% from $12.1 billion in 3Q16 to $14.6 billion in 3Q17. This rise was mainly due to policyholder benefits and losses rising. In 3Q17, AIG incurred policyholder benefits and losses of $10.3 billion, compared with $7.5 billion in 3Q16, a […]
Understanding Chubb’s North America Agricultural Insurance Division
Chubb’s North America Agricultural Insurance division generated underwriting income of $116.0 million in 1H17 compared to $67.0 million in 1H16, which implies an increase of 73.1%.
What Happened with Chubb’s Life Insurance Division?
In 1H17, Chubb Limited’s (CB) Life Insurance business reported income of $114.0 million in 1H17 compared to $134.0 million in 1H16, reflecting a 14.9% decline.
Inside Chubb’s Overseas General Insurance Division
Chubb’s Overseas General Insurance Division generates the majority of its net premiums written from Latin America, Europe, and Asia.
Why Chubb’s Personal Insurance Business Saw a Rise in Income
Chubb Limited’s (CB) Personal Property and Casualty business’s underwriting income rose from $138.0 million in 1H16 to $285.0 million in 1H17, reflecting an increase of 106.5%.
Chubb’s Net Investment Income Rose in 1H17
Chubb Limited (CB) reported net investment income of ~$1.5 billion in 1H17 compared to ~$1.4 billion in 1H16, reflecting a 9.6% increase. CB generated an 11% return on equity on a trailing-12-month basis.
Understanding AIG’s Reshuffling and Technology Initiatives
Brian Duperreault, chief executive officer of American International Group (AIG), has taken a major step by reshuffling the company into three units.
AIG in 3Q17: What We Can Expect
American International Group (AIG) is expected to announce its earnings for 3Q17 on November 2, 2017. Wall Street analysts have provided a high estimate of $0.90 for AIG’s 3Q17 EPS.
Berkshire Hathaway’s Insurance: What to Expect amid Rising Claims
Berkshire Hathaway (BRK.B) saw subdued profits in its Insurance segment in 2Q17, mainly due to higher claims. The trend is set to get stronger in the second half of 2017
Where MetLife’s Expected Total Dividend for 2017 Stands next to Allstate’s
In 2017, MetLife (MET) is expected to declare a total dividend of $1.61 per share, representing an increase of 1.9% from the total dividend it declared in 2016.
What Else Could Make This an Expensive Year for Insurance Giants?
US insurance giants (IYF) are expected to witness costs in the range of $20 billion–$65 billion stemming from the effects Hurricane Irma.
What’s Happening with AIG’s Commercial Insurance Division?
From January 2016–June 2016, AIG managed to report total operating revenues of $10.8 billion—a 15% YoY fall, primarily due to lower premiums in 1H17.
What Led to Chubb’s Premium Valuations?
Wall Street analysts have given a one-year price target of $157.53 on Chubb (CB), an increase of 11.4% from the current price level.
How Chubb’s Life Insurance Division Fared
Chubb’s (CB) life insurance division has posted net premiums written of $523 million in 2Q17 as compared to $527 million in 2Q16.
How Chubb’s Overseas General Insurance Division Performed
Chubb’s (CB) Overseas General Insurance division saw a decline in its net premiums written in 2Q17 from $2.01 billion as compared to $2.03 billion in 2Q16.
Why Chubb’s Global Reinsurance Division’s Income Rose
Chubb’s (CB) global reinsurance division has witnessed a substantial fall in its net premiums written in 2Q17 as compared to 2Q16.
How CB’s North America Agricultural Insurance Division Fared
Chubb’s (CB) North America Agricultural Insurance division witnessed a rise of 7.7% in its net premiums written in 2Q17 as compared to 2Q16.
How CB’s North America Personal Property Insurance Segment Performed
Chubb Limited (CB) has witnessed a rise of 2.0% in its net premiums written in 2Q17 as compared to 2Q16.
How Chubb’s North American Commercial Property Segment Performed
Chubb’s (CB) North America Commercial Property and Casualty Insurance division witnessed a marginal fall in its net premiums written in 2Q17 as compared to 2Q16.
Chubb Beat EPS Estimates but Missed Revenue Estimates
Chubb (CB) reported earnings per share (or EPS) of $2.50 in 2Q17, which beat Wall Street analyst estimates of $2.47.
Prudential’s Discounted Valuations in 2Q17
Wall Street analysts recommended a one-year price target of $116.07 per share on Prudential Financial (PRU), reflecting an increase of ~14.1% from the current price.
A Look at Prudential Financial’s Dividends in 2017
In 2016, Prudential Financial (PRU) declared total dividends of $2.80 per share. In 2017, the company is expected to declare total dividends of $3.06 per share.
Insights into Prudential’s International Insurance Division
Prudential Financial’s (PRU) Life Planner division experienced an increase in its earnings in 2Q17 compared to 2Q16.
How Wall Street Analysts View AIG
American International Group (AIG) is covered by 18 analysts, out of which seven analysts gave “strong buy” ratings on the stock.
Understanding Prudential’s Group Insurance and Individual Life Earnings
In 2Q17, on the basis of annualized new business premiums, sales in Prudential’s Individual Life business stood at $153 million, reflecting a marginal decline of ~3.8% year-over-year.
Why AIG Discounted Its Valuations in 2017
Wall Street analysts have given a one-year price target of $70.00 on American International Group (AIG), which reflects an ~14.1% increase from the current price.
Why Earnings Rose in Prudential’s Asset Management Business
In 2Q17, earnings from Prudential’s asset management business stood at $218 million compared to $207 million in 2Q16.
Insights on AIG’s Share Repurchases
In 2Q16, AIG reported operating general operating expenses (or GOE) of $2.4 billion, which the company reduced by $191.0 million. It reported GOE of $2.2 billion in 2Q17.
Analyzing Prudential’s Individual Annuities and Retirement Businesses
After excluding market-driven and discrete items, earnings from Prudential Financial’s individual annuities stood at $512 million in 2Q17 compared to $375 million in 2Q16.
Understanding AIG’s Dividend Distribution in 2017
AIG is expected to declare dividends of $1.33 per share in 2017, reflecting a rise of ~38.5% from the total dividends declared in 2016.
Analyzing AIG’s Life and Personal Insurance Business
AIG’s pretax operating income for personal insurance stood at $330 million in 2Q17. In 2Q16, it stood at $152 million.
AIG’s Individual and Group Retirement Businesses amid Strong Equity Markets
American International Group’s (AIG) Consumer Business division reported pretax operating income of ~$1.3 billion in 2Q17 compared to $948.0 million in 2Q16.
Why AIG’s Commercial Business Segment’s Operating Income Fell in 2Q17
In 2Q17, the pretax operating income of AIG’s Commercial Business division stood at $716 million compared to $941 million in 2Q16.
Why AIG’s Net Income Fell on a Year-over-Year Basis
AIG is expected to post earnings per share of $1.22 in 3Q17, an ~20.3% decline from its 2Q17 earnings. AIG is expected to report revenues of ~$11.8 billion in 3Q17.
Reinsurance, P&C Weigh on AIG’s Commercial Business
AIG’s Commercial division saw a loss ratio of 71.9 in 1Q17. AIG saw its book value expand ~2.5% in 1Q17 on a year-over-year basis.
AIG’s Restructuring Costs Consistent amid Strategic Transactions
In 4Q16, American International Group (AIG) spent $206.0 million on restructuring initiatives that target inefficiencies and expense reduction.
Why AIG Rose 14% in a Quarter despite Missing Estimates
In this series, we’ll study AIG’s expected performance, investment profitability, operating divisions, expansion, balance sheet, dividends, and valuations.
Prudential Rewarded Shareholders with $930 Million in 3Q16
In 3Q16, the company returned $930.0 million to shareholders in the form of dividends and buybacks.
Berkshire’s Insurance Falls on Reinsurance and GEICO in 3Q
Berkshire Hathaway (BRK-B) saw underwriting revenues rise on a year-over-year basis in 3Q16 to $12.4 billion.
AIG’s Consumer Insurance Benefits from Hedge Funds, Underwriting
American International Group’s (AIG) Consumer Insurance division recorded a rise in pretax operating earnings in 3Q16. The division’s pretax operating income rose to ~$1.4 billion compared with ~$657 million in 3Q15.
AIG’s Restructuring Initiatives to Take Further Shape in 3Q
American International Group (AIG) has announced that it will spend $500 million on restructuring initiatives.
Prudential Returns $700 Million in Payouts to Shareholders
Prudential Financial has been very consistent with dividend payouts to shareholders, which makes it a very strong prospect for long-term value investors.
Berkshire Hathaway’s Insurance Rises on GEICO, Primary Group in 2Q
Berkshire Hathaway’s statutory surplus for its insurance businesses was $124 billion on December 31, 2015.
Prudential Saw a Fall in 2Q16 on Lower US Sales
Prudential Financial (PRU) reported its 2Q16 earnings results on August 3, 2016. It reported adjusted operating income per share of $1.84 in the quarter.
Prudential Remains Prudent on Returning Capital to Shareholders
Prudential Financial (PRU) has been very consistent with dividend payouts to shareholders, which makes the stock a very strong prospect for long-term value investors.
Is Prudential Financial on the Road to Recovery in 2016?
In 1Q16, Prudential’s revenues fell 4.4% year-over-year to $11.3 billion. On a constant dollar basis, the company saw a decline in its international insurance and US retirement solutions businesses.
How Prudential Has Boosted Shareholder Payout
Since 2010, Prudential Financial (PRU) has returned approximately $10 billion to shareholders in the form of dividends and buybacks.
Prudential’s US Individual Division to Benefit from Lower Charges
Prudential Financial’s (PRU) US Individual Life and Group Insurance division saw a fall in operating income on lower group insurance revenues.
How’s AIG Doing in Its Simplification Process?
In 2015, AIG continued its simplification process for its balance sheet. In 2016, AIG is expected to strengthen its balance sheet with higher operating cash flows.
AIG’s Commercial Insurance: Will It Post a Profit in 1Q16?
AIG reported a pre-tax operating loss of $2.1 billion for its commercial insurance business in 4Q15 compared to a pre-tax operating income of $1.2 billion in 4Q14.
Strong Dollar Continues to Impact Prudential Internationally
On a constant dollar basis, Prudential Financial’s (PRU) International Insurance segment reported a 7% rise in revenues in 4Q15.
Could Icahn and Citi Be Suggesting an AIG Sale?
As AIG continues to decline, there are suggestions as well as speculation of an AIG sale. These speculations, although they seem unlikely to happen, can push AIG’s stock prices.
The Rationale behind AIG’s Heavy Repurchases
In 4Q15, AIG repurchased 53 million shares for an aggregate purchase price of $3.2 billion. It made additional repurchases of $2.5 billion through the end of February 11, 2016.
Prudential Financial Expected to See Higher Profits in 1Q16
Prudential Financial’s (PRU) stock has risen by 7% in the past month and has fallen by 13% in the past quarter.
How GEICO Helped Berkshire’s Insurance Deliver Strong Numbers
Berkshire Hathaway’s commercial lines business has expanded by 125% over the past five years to $5.6 billion through acquisitions and organic growth.
Are You a Treasury Bond Mutual Fund Investor by Choice or Chance?
Much of what you can do with your Treasury bond mutual fund for the remainder of 2016 depends on what your intention of investing in the instrument is.
Could the Interest Rate Hike Boost Berkshire’s Insurance Income?
The recent increase in the interest rates will likely boost the Berkshire Hathaway’s insurance income.
What AIG Is Suggesting as an Alternative to Icahn’s Proposal
American International Group (AIG) has announced that it will spend $500 million on restructuring initiatives for organizational simplification, operational efficiency, and business rationalization.
How Buffett Keeps Expanding Services at Berkshire Hathaway
Berkshire Hathaway’s service and retailing revenues increased to $6.2 billion during 3Q15, compared to $3.5 billion in the prior year’s quarter.
How Progressive Commands Premium Valuations on Higher Margins
Progressive (PGR) reported 3Q15 earnings per share of $0.47, a 6% decrease over the third quarter of 2015.
Prudential Financial’s 2Q15 Earnings Beat Estimates
Prudential Financial’s 2Q15 revenue rose by 12% year-over-year to $12.5 billion, exceeding consensus estimates of $11.2 billion. Its net income was $1.4 billion, up by 29% compared with 2Q14.
Progressive Stock Advances on 2Q15 Earnings
Progressive Corporation (PGR) reported its second-quarter earnings on July 17. The firm reported net income of $363 million and revenues of $5.25 billion, up by 13.4% over 2Q14.
ACE to Acquire Chubb: The Strength of a Healthy Balance Sheet
With the acquisition of Chubb, ACE will be better positioned to compete with rivals including Warren Buffett’s Berkshire Hathaway and Allstate, among others.
Ace Merges with Chubb to Create Insurance Giant
Shares of Chubb Group (CB) surged by 26.12% on July 1 on news of an acquisition by global property giant Ace (ACE).
AIG Advances on Risk Reduction and Balance Sheet Simplification
As of June 2015, AIG’s stock has appreciated by about 12% over the past six months and by 11% over the last year.
Personal Lines Rates Were Up 2% in February
The US personal lines businesses have seen improved profitability from the 2011 levels.
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.
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.
AIG delivers on its financial objectives
AIG’s financial objectives focus on profitability improvement, expense management, and balance sheet growth, achieving a sustainable ROE.
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.