Insurance Weekly Notes: MetLife, UnitedHealth

+8.46%
Upside
72.55
Market
78.69
Trefis
MET: MetLife logo
MET
MetLife

During the week ended November 21, the stocks of both MetLife (NYSE:MET), which completed a merger of its subsidiaries, and UnitedHealth (NYSE:UNH), which increased its presence on health exchanges for the second open enrollment period, posted positive gains. Below we review the week for the two companies.

MetLife

Earlier in the week, MetLife completed the merger of its subsidiaries MetLife Insurance Company of Connecticut, MetLife Investors USA Insurance Company, MetLife Investors Insurance Company and Exeter Reassurance Company Limited. [1] According to the company press release, all the required regulatory approvals have been received and the new entity will be called MetLife Insurance Company USA.

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The company in 2013 announced the decision to merge the abovementioned entities in order to meet collateral requirements laid out in the Dodd-Frank Act, to address regulations related to the captive reinsurance companies, and also to improve the risk profile and transparency of MetLife’s U.S. variable annuity business. The company also mentioned that all previous policies, benefits, contracts and terms and conditions of the retained assets will remain unaffected as a result of this merger.

MetLife’s stock gained about 2.5% during the week, and is now just slightly below our price estimate of $59 for the company’s stock. During the recently announced third quarter results, the company posted a 22% year-over-year increase in its operating income on the back of higher income from investments and a robust growth in emerging markets. [2]

See our complete analysis of MetLife here

UnitedHealth

UnitedHealth started offering health insurance coverage on twenty-three health exchanges across the U.S. for the second open enrollment period that began on November 15, 2014. This is a significant and much awaited expansion by the health insurer from just about a dozen health exchanges during the previous open enrollment period. [3] In our article Health Insurance Exchanges And Their Impact On UnitedHealth Group, we discussed the impact of health exchanges.

See Full Analysis For UnitedHealth Group Here

Notes:
  1. METLIFE COMPLETES MERGER OF THREE LIFE INSURANCE COMPANIES AND ONE FORMER OFFSHORE REINSURANCE SUBSIDIARY, MetLife Press Release []
  2. Growth In Emerging Markets And Higher Investment Income Drive MetLife’s Q3 Earnings, Trefis []
  3. UnitedHealthcare to Offer Consumers Health Insurance Coverage on 23 Individual Exchanges for 2015, United Health Press Release []