We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks Industry Outlook Highlights: American International Group, Cigna Corp, MetLife and Prudential Financial
Read MoreHide Full Article
For Immediate Release
Chicago, IL – June 1, 2021 – Today, Zacks Equity Research discusses Multi-Line Insurance, including American International Group, Inc. (AIG - Free Report) , Cigna Corporation (CI - Free Report) , MetLife, Inc. (MET - Free Report) and Prudential Financial, Inc. (PRU - Free Report) .
The Zacks Multiline Insurance industry has outperformed the broader market year to date, riding on its core strengths. While the insurance industry has rallied 20.1%, the Zacks S&P 500 composite and the Zacks Finance sector have increased 12.5% and 19.6%, respectively.
Though pandemic-led challenges weigh on the performance of industry players, product diversification, improved pricing, prudent underwriting, increased exposure, adoption of technology and solid capital position should continue to drive the industry. Diversification of business, addition of capabilities, and expansion of global presence alongside the growth in niches should add to the upside. Notably, the industry’s earnings estimate for the current year has been revised upward by 20.3% in the past four weeks.
In its March FOMC meeting, the central bank was upbeat about its economic projections. The U.S. economy is projected to grow 6.5% in 2021, up from the December projection of 4.2%. Unemployment rate is expected to improve to 4.5% from 5% projected in December 2020. In its April FOMC meeting, the Federal Reserve pointed out that ”Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened.’’
Though a low interest rate environment weighs on investment results, improvement in surplus, and reopening of economic activities should lead to a better M&A environment this year as funding purchases become more affordable.
As evident from the name, these insurers provide a single insurance coverage, combining automobile, homeowner, long-term care, life and health insurance into one policy for individuals and businesses. Thus, they stand to benefit from a diversified portfolio, which lowers concentration risk.
Moreover, reinsurance arrangements and favorable reserve provide additional support.
Insurers are increasingly adopting technologies like artificial intelligence, robotic process automation, cognitive intelligence, advanced analytics, telematics, blockchain and cloud computing. This helps in managing costs and margin expansion.
The Zacks Multiline Insurance industry is currently undervalued compared with the Zacks S&P 500 composite as well as the Zacks Finance sector. The price-to-book (P/B) ratio, the best multiple for valuing insurers because of their unpredictable financial results, is 0.86, less than the Zacks S&P 500 composite’s P/B of 6.97 and the sector’s P/B of 3.32. Such below-market positioning hints at room for upside in the coming quarters.
Stocks in Focus
With the help of the Zacks Stock Screener, we have selected four insurance stocks that are well poised for growth riding on operational strength. These stocks have outperformed the industry year to date and witnessed upward estimate revisions in the past four weeks. Each of the stocks carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American International Group provides insurance products for commercial, institutional, and individual customers in North America and internationally. Strategic business de-risking and acquisitions, cost control efforts, and accelerated capital deployment are expected to drive growth. The Zacks Consensus Estimate for 2021 indicates year-over-increase of 78.2% and has moved 1.1% north in the past four weeks. The expected long-term earnings growth rate is 10%.
Cigna Corp. provides insurance and related products and services. Acquisition of Express Scripts, strong international operations and growing medical membership auger well for growth. The Zacks Consensus Estimate for 2021 has moved 0.6% north in the past four weeks and indicates 10.7% year-over-year increase. The expected long-term earnings growth rate is 11.5%. It carries a favorable VGM Score of B.
MetLife is an insurance-based global financial services company providing protection and investment products to a range of individual and institutional customers. Its focus on businesses with growth potential and strategies to control cost and increase efficiency bode well for growth.
The Zacks Consensus Estimate for 2021 indicates year-over-increase of 15.8% and has moved up 13.2% in the past four weeks. The expected long-term earnings growth rate is pegged at 4.8%. It carries an impressive VGM Score of A.
Prudential Financial offers an array of financial products and services including life insurance, annuities, retirement-related services, mutual funds, investment management and real estate services. Prudential continues to benefit from solid asset-based businesses, improved margins in Group Insurance business and international operations.
The high-performing asset management business and deeper reach in the pension risk transfer market are catalysts for long-term growth. The Zacks Consensus Estimate for 2021 indicates year-over-increase of 28.5% and has moved up 10.9% in the past four weeks. The expected long-term earnings growth rate stands at 10.6%. It carries an impressive VGM Score of A.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks Industry Outlook Highlights: American International Group, Cigna Corp, MetLife and Prudential Financial
For Immediate Release
Chicago, IL – June 1, 2021 – Today, Zacks Equity Research discusses Multi-Line Insurance, including American International Group, Inc. (AIG - Free Report) , Cigna Corporation (CI - Free Report) , MetLife, Inc. (MET - Free Report) and Prudential Financial, Inc. (PRU - Free Report) .
Link: https://www.zacks.com/stock/news/1619369/multiline-insurance-industry-gains-20-ytd-stocks-in-focus
The Zacks Multiline Insurance industry has outperformed the broader market year to date, riding on its core strengths. While the insurance industry has rallied 20.1%, the Zacks S&P 500 composite and the Zacks Finance sector have increased 12.5% and 19.6%, respectively.
Though pandemic-led challenges weigh on the performance of industry players, product diversification, improved pricing, prudent underwriting, increased exposure, adoption of technology and solid capital position should continue to drive the industry. Diversification of business, addition of capabilities, and expansion of global presence alongside the growth in niches should add to the upside. Notably, the industry’s earnings estimate for the current year has been revised upward by 20.3% in the past four weeks.
In its March FOMC meeting, the central bank was upbeat about its economic projections. The U.S. economy is projected to grow 6.5% in 2021, up from the December projection of 4.2%. Unemployment rate is expected to improve to 4.5% from 5% projected in December 2020. In its April FOMC meeting, the Federal Reserve pointed out that ”Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened.’’
Though a low interest rate environment weighs on investment results, improvement in surplus, and reopening of economic activities should lead to a better M&A environment this year as funding purchases become more affordable.
As evident from the name, these insurers provide a single insurance coverage, combining automobile, homeowner, long-term care, life and health insurance into one policy for individuals and businesses. Thus, they stand to benefit from a diversified portfolio, which lowers concentration risk.
Moreover, reinsurance arrangements and favorable reserve provide additional support.
Insurers are increasingly adopting technologies like artificial intelligence, robotic process automation, cognitive intelligence, advanced analytics, telematics, blockchain and cloud computing. This helps in managing costs and margin expansion.
The Zacks Multiline Insurance industry is currently undervalued compared with the Zacks S&P 500 composite as well as the Zacks Finance sector. The price-to-book (P/B) ratio, the best multiple for valuing insurers because of their unpredictable financial results, is 0.86, less than the Zacks S&P 500 composite’s P/B of 6.97 and the sector’s P/B of 3.32. Such below-market positioning hints at room for upside in the coming quarters.
Stocks in Focus
With the help of the Zacks Stock Screener, we have selected four insurance stocks that are well poised for growth riding on operational strength. These stocks have outperformed the industry year to date and witnessed upward estimate revisions in the past four weeks. Each of the stocks carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American International Group provides insurance products for commercial, institutional, and individual customers in North America and internationally. Strategic business de-risking and acquisitions, cost control efforts, and accelerated capital deployment are expected to drive growth. The Zacks Consensus Estimate for 2021 indicates year-over-increase of 78.2% and has moved 1.1% north in the past four weeks. The expected long-term earnings growth rate is 10%.
Cigna Corp. provides insurance and related products and services. Acquisition of Express Scripts, strong international operations and growing medical membership auger well for growth. The Zacks Consensus Estimate for 2021 has moved 0.6% north in the past four weeks and indicates 10.7% year-over-year increase. The expected long-term earnings growth rate is 11.5%. It carries a favorable VGM Score of B.
MetLife is an insurance-based global financial services company providing protection and investment products to a range of individual and institutional customers. Its focus on businesses with growth potential and strategies to control cost and increase efficiency bode well for growth.
The Zacks Consensus Estimate for 2021 indicates year-over-increase of 15.8% and has moved up 13.2% in the past four weeks. The expected long-term earnings growth rate is pegged at 4.8%. It carries an impressive VGM Score of A.
Prudential Financial offers an array of financial products and services including life insurance, annuities, retirement-related services, mutual funds, investment management and real estate services. Prudential continues to benefit from solid asset-based businesses, improved margins in Group Insurance business and international operations.
The high-performing asset management business and deeper reach in the pension risk transfer market are catalysts for long-term growth. The Zacks Consensus Estimate for 2021 indicates year-over-increase of 28.5% and has moved up 10.9% in the past four weeks. The expected long-term earnings growth rate stands at 10.6%. It carries an impressive VGM Score of A.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.