MetLife Sets Sights on International Growth
While the U.S. insurance market is highly competitive and saturated providing little room for growth, international insurance is highly lucrative and rapidly growing. MetLife (NYSE:MET) is looking to tackle this market with recent moves as the largest insurance company in the U.S. with total assets of over $730 billion as of December 31, 2010. MetLife competes with AIG (NYSE:AIG), The Hartford (NYSE:HIG), Prudential Financial (NYSE:PRU) and New York Life Company.
We have a price estimate of $48.83 on MetLife‘s stock which is about 9-10% above the current market price. The international insurance division constitutes 18% of the Trefis price estimate for MetLife’s stock.
International Insurance at a Glance
2) International Insurance Premium Market
The total market size for international insurance premiums increased gradually from $2.5 trillion in 2006 to about $3 trillion in 2008 at a compound annual growth rate of 9.1% before dipping in 2009.
As the prospects for life insurance remain positive, we believe insurance premiums are expected to grow in the long term-trend. The recovery of financial market is likely to stimulate the growth of unit-linked products, thereby pushing up the sales of saving products and in turn boosting the premiums of insurance companies. The long term prospects for life insurance remain favorable in light of demographic trends in many developing countries.