Outlook for MetLife’s International Insurance Market Share

February 8th, 2011 by Trefis Team
+8.96%
Upside
72.22
Market
78.69
Trefis
MET: MetLife logo
MET
MetLife

MetLife’s (NYSE:MET) share of the international insurance market has seen slight fluctuations over the past few years. The firm’s share increased to 0.15% in 2008 after it acquired a 50% stake in MetLife Fubon, which operates in Hong Kong. The share declined a bit in 2009 due to foreign currency transactions, and picked up again in 2010. We anticipate that MetLife will continue to maintain its share in the insurance market at around 0.16% led by its acquisition of American Life Insurance Company (ALICO). However, intense competition from big companies like AIG (NYSE:AIG), Hartford Financial (NYSE:AIG) and Prudential Finance (NYSE:PRU) as well as local insurers in other countries could put downward pressure on the firm’s stock value.

While we expect MetLife to maintain a market share of 0.16% over our forecast period, Trefis members predict that this number will cross 0.18%, suggesting upside to our price estimate for MET.

Relevant Articles
  1. Dropping 5% Since The Start Of 2023, Can MetLife Stock Rebound?
  2. Trailing The S&P Index By 30% YTD, Can MetLife Stock Recoup Its Losses?
  3. Where Is MetLife Stock Headed?
  4. MetLife Stock Has A 44% Upside To Its Pre-Inflation Peak
  5. Is MetLife Stock Fairly Priced?
  6. What To Expect From MetLife Stock?

Our price estimate for MetLife stock, at $39.69, currently stands below market price.

ALICO Acquisition Could Lift MetLife’s Market Share…

MetLife acquired AIG’s international subsidiary, ALICO, for $15.5 billion last year after a chase since December 2008. The acquisition strengthened MetLife’s push into Japan, the second largest life insurance market in the world. Notably, ALICO generated roughly 70% of its pre-tax operating profit last fiscal year in Japan. ALICO also gives MetLife some momentum in Europe and puts the firm in a strong position across a variety of emerging markets. [1]

The acquisition also gives MetLife a foothold in around 50 countries where ALICO has operations either directly or through subsidiaries. [2] The acquisition should spark further growth in MetLife’s market share in the international insurance market.

… But Competition Could Pose a Headwind

MetLife competes with a number of life insurers such as AIG, Prudential Finance, New York Life and Northwest Mutual, many of which are comparable in size to MetLife. In addition to these big firms, MetLife also competes with a number of local and regional companies in the international markets in which it operates. Intense competition in the life and health insurance market can put downward pressure on MetLife’s market share.

See our full analysis and $39.69 price estimate for MetLife

Trefis Community Forecast

Trefis community members forecast that MetLife’s share of the international insurance market will increase from 0.16% in 2010 to over 0.18% by the end of our forecast period, compared to the flat Trefis estimate of 0.16% in the years ahead. The member estimates imply a slight upside to our $39.69 price estimate for MetLife’s stock.

Notes:
  1. MetLife seals Alico deal after two-year quest, Reuters, March 8, 2010 [↩]
  2. AIG Sells Alico Health Insurance Unit To MetLife For $15.5B, Huffington Post, March 8, 2010 [↩]