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AIG's Corebridge (CRBG) to Sell UK Life, Streamlines Operations
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Corebridge Financial, Inc. (CRBG - Free Report) , a subsidiary of AIG’s parent company, recently announced that it has entered into a definitive agreement to divest its UK Life business to Aviva plc. Corebridge Financial is expected to receive a total consideration of £460 million in cash per the deal. The divestiture is expected to close by the first half of 2024, subject to closing conditions and regulatory approvals.
This move bodes well for CRBG, intensifying its focus on its Life & Retirement unit in the United States and streamlining the portfolio. The company expects to leverage the attractive qualities of the U.S. business to deliver earnings growth and value to shareholders. CRBG acquired the UK Life business in 2014 and since then, built it into an established Life insurance company.
The divestiture builds on CRBG’s strategic initiatives to focus on its U.S. operations. The company announced its intent to sell Laya Healthcare Limited on August 2023 to AXA, which is expected to close by the fourth quarter of 2023. CRBG expects to use the proceeds from this transaction to pay special dividends to shareholders. The U.S. Life and Retirement market is the fastest and largest growing market, and the company’s focus on scaling this by withdrawing its resources from other markets is expected to benefit the company in the long run.
The company targets a return on equity (ROE) of 12-14% by 2024. It recorded an ROE of 12% in the first half of 2023. It also aims to achieve a 60-65% payout ratio by 2024. Streamlining operations should help the company in reducing costs and improving margins. Corebridge’s Forward program is also delivering well on its objective to attain $400 million in exit run-rate savings by 2024.
Zacks Rank & Price Performance
Corebridge Financial currently carries a Zacks Rank #3 (Hold). Shares of CRBG have gained 27.7% in the past six months compared with the industry’s 12.2% growth.
AXIS Capital’s earnings surpassed estimates in three of the trailing four quarters and missed the mark once, the average surprise being 9.8%. The Zacks Consensus Estimate for AXS’s 2023 earnings suggests an improvement of 44.8%, while the consensus estimate for revenues suggests growth of 7.9% from the corresponding year-ago reported figures. The consensus mark for AXS’s 2023 earnings has moved 10.4% north in the past 60 days.
The bottom line of Chubb beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 3.4%. The Zacks Consensus Estimate for CB’s 2023 earnings suggests an improvement of 19.3%, while the consensus estimate for revenues suggests growth of 8.8% from the corresponding year-ago reported figures. The consensus mark for CB’s 2023 earnings has moved 3.5% north in the past 60 days.
Aflac’s earnings outpaced estimates in each of the last four quarters, the average surprise being 7.8%. The Zacks Consensus Estimate for AFL’s 2023 earnings suggests an improvement of 12.2% from the year-ago reported figure. The consensus mark for AFL’s 2023 earnings has moved 3.3% north in the past 60 days.
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AIG's Corebridge (CRBG) to Sell UK Life, Streamlines Operations
Corebridge Financial, Inc. (CRBG - Free Report) , a subsidiary of AIG’s parent company, recently announced that it has entered into a definitive agreement to divest its UK Life business to Aviva plc. Corebridge Financial is expected to receive a total consideration of £460 million in cash per the deal. The divestiture is expected to close by the first half of 2024, subject to closing conditions and regulatory approvals.
This move bodes well for CRBG, intensifying its focus on its Life & Retirement unit in the United States and streamlining the portfolio. The company expects to leverage the attractive qualities of the U.S. business to deliver earnings growth and value to shareholders. CRBG acquired the UK Life business in 2014 and since then, built it into an established Life insurance company.
The divestiture builds on CRBG’s strategic initiatives to focus on its U.S. operations. The company announced its intent to sell Laya Healthcare Limited on August 2023 to AXA, which is expected to close by the fourth quarter of 2023. CRBG expects to use the proceeds from this transaction to pay special dividends to shareholders. The U.S. Life and Retirement market is the fastest and largest growing market, and the company’s focus on scaling this by withdrawing its resources from other markets is expected to benefit the company in the long run.
The company targets a return on equity (ROE) of 12-14% by 2024. It recorded an ROE of 12% in the first half of 2023. It also aims to achieve a 60-65% payout ratio by 2024. Streamlining operations should help the company in reducing costs and improving margins. Corebridge’s Forward program is also delivering well on its objective to attain $400 million in exit run-rate savings by 2024.
Zacks Rank & Price Performance
Corebridge Financial currently carries a Zacks Rank #3 (Hold). Shares of CRBG have gained 27.7% in the past six months compared with the industry’s 12.2% growth.
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Stocks to Consider
Some better-ranked stocks in the insurance space are AXIS Capital Holdings Limited (AXS - Free Report) , Chubb Limited (CB - Free Report) and Aflac Incorporated (AFL - Free Report) . AXIS Capital sports a Zacks Rank #1 (Strong Buy), while Chubb and Aflac carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AXIS Capital’s earnings surpassed estimates in three of the trailing four quarters and missed the mark once, the average surprise being 9.8%. The Zacks Consensus Estimate for AXS’s 2023 earnings suggests an improvement of 44.8%, while the consensus estimate for revenues suggests growth of 7.9% from the corresponding year-ago reported figures. The consensus mark for AXS’s 2023 earnings has moved 10.4% north in the past 60 days.
The bottom line of Chubb beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 3.4%. The Zacks Consensus Estimate for CB’s 2023 earnings suggests an improvement of 19.3%, while the consensus estimate for revenues suggests growth of 8.8% from the corresponding year-ago reported figures. The consensus mark for CB’s 2023 earnings has moved 3.5% north in the past 60 days.
Aflac’s earnings outpaced estimates in each of the last four quarters, the average surprise being 7.8%. The Zacks Consensus Estimate for AFL’s 2023 earnings suggests an improvement of 12.2% from the year-ago reported figure. The consensus mark for AFL’s 2023 earnings has moved 3.3% north in the past 60 days.