Insurance Weekly Notes: Hartford Financial, Manulife

During the week ended December 26, Hartford Financial’s (NYSE:HIG) stock surged to a 52-week high. In this article we also take a look at recent business developments as part of Canadian insurer Manulife‘s (NYSE:MFC) strategy to grow its wealth and assets management business.

Hartford’s Stock Surges Ahead

Earlier this week, Hartford’s stock touched a 52-week high of $42.42. The stock has increased nearly 20% since January. Earlier last year, Hartford had divested its individual life insurance business to focus on property and casualty, group insurance and mutual funds. The company’s performance in the third quarter this year beat Wall Street estimates, giving an additional boost to the stock price, which has sustained upward movement since then.

Valuing the company at nearly $19 billion, we have a price estimate of $44 for Hartford’s stock. This is slightly higher than the current market price.

See our full analysis of Hartford here

Significant Boost To Manulife’s Retirement Business In The U.S.

Earlier in the week, Manulife announced the acquisition of New York Life’s retirement plan business in the U.S. The deal between John Hancock (Manulife’s U.S. brand) and New York Life is expected to be completed in the first half of 2015. ^[1] Terms of the transaction have not yet been made public. As part of the agreement, New York Life will assume nearly three-fifths of John Hancock’s certain life insurance policies on a reinsurance basis. For Manulife, this deal is part of a broader strategy to expand the wealth and asset management business. In September this year, Manulife acquired Standard Life plc’s operations in Canada. ^[2]

The deal with New York Life will provide a boost to John Hancock’s retirement business in the U.S. As a result, John Hancock’s assets under management are expected to increase by around 60% to approximately $135 billion with, 55,000 retirement plans and 2.5 million customers.

We have a price estimate of $19 for the company’s stock, which is about in line with the current market price. Our estimate of EPS for the current calendar year is just under $1.50, slightly below the consensus EPS.

See our complete analysis of Manulife here

1. Manulife Announces Transaction with New York Life Which Significantly Expands John Hancock’s Retirement Plan Services Business, Manulife Press Release [↩]
2. Manulife to acquire the Canadian Operations of Standard Life plc, Manulife Press Release [↩]