【出版时间及名称】：2010年4月美国寿险行业研究报告
        【作者】：德意志银行
        【文件格式】：pdf
        【页数】：36
        【目录或简介】：
Darin C Arita, CFA
Research Analyst
(+1) 212 250-7321
darin.c.arita@db.com
Valerie Zhang, CFA
Research Associate
( ) 212 250-2861
valerie.zhang@db.com
Expecting a strong earnings quarter
The 5% increase in the equity market and further improvement in credit markets
should lead to in line to better than expected 1Q'10 results. Equity market
sensitive life insurers should benefit from rising fee income and favorable
amortization of deferred acquisition costs (DAC), and we expect alternative
investment income to improve. Book value per share should also increase as
credit spreads improved for CMBS and hybrid securities. We revised EPS
estimates for several companies on page 4 to account for the market strength.
Deutsche Bank Securities Inc.
All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local
exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche
Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm
may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.
MICA(P) 106/05/2009
Industry Update
Companies featured
Aflac Incorporated (AFL.N),USD56.56 Hold
2009A 2010E 2011E
EPS (USD) 4.85 5.30 5.65
P/E (x) 7.1 10.7 10.0
Genworth Financial (GNW.N),USD18.78 Hold
2009A 2010E 2011E
EPS (USD) 0.44 1.02 1.59
P/E (x) 15.1 18.4 11.8
Hartford Financial Services (HIG.N),USD28.15 Buy
2009A 2010E 2011E
EPS (USD) 1.85 3.35 3.25
P/E (x) 9.2 8.4 8.7
Lincoln National (LNC.N),USD32.65 Hold
2009A 2010E 2011E
EPS (USD) 3.20 3.50 3.70
P/E (x) 5.8 9.3 8.8
MetLife (MET.N),USD46.43
2009A 2010E 2011E
EPS (USD) 2.87 – –
P/E (x) 10.9 – –
Protective Life (PL.N),USD25.43 Hold
2009A 2010E 2011E
EPS (USD) 3.01 2.50 2.80
P/E (x) 4.5 10.2 9.1
Prudential Financial (PRU.N),USD65.11 Hold
2009A 2010E 2011E
EPS (USD) 5.58 5.80 6.50
P/E (x) 6.8 11.2 10.0
Unum (UNM.N),USD26.41 Buy
2009A 2010E 2011E
EPS (USD) 2.57 2.65 3.05
P/E (x) 6.7 10.0 8.7
Global Markets Research Company
Company-specific metrics likely to be the focus
We expect investors to focus more on what is happening at the individual
company level rather than general measures like book value growth and RBC
ratios. For example, the following are key focus points by company: Aflac – sales
production in Japan and US; Genworth – US mortgage insurance loss trends;
Hartford – life insurance earnings power; Lincoln – letter of credit solutions and
TARP repayment progress; Principal – Full Service Accumulation net flows;
Prudential – progress on deploying excess capital; Protective – Life Marketing
earnings trend and acquisition opportunities; and Unum – capital management
update.
Life stocks outperform as ROE potential increases
Life insurance stocks increased by 27% on average in 1Q’10 versus 5% for the
S&P 500, and are now trading on average at 1.0x book value (excluding unrealized
investment gains/losses) and 10.5x 2010E EPS. As we indicated in our Outlook
report at the start of the year, the key for continued stock outperformance will be
for the companies to increase their ROEs to levels above 10%, which is our
estimate of the industry’s cost of capital. The two biggest drivers will be rising
equity markets and higher interest rates. Thus far, the increase in the equity
market has helped, but long-term Treasury yields have remained flat.
Unum and Hartford are our Buy-rated stocks
Unum (UNM) is our top pick, with share repurchases and top-line growth
acceleration as potential catalysts. The company has more excess capital than any
of the other life insurers relative to its size, and it would benefit as US employment
improves. Weakness in the British pound during 1Q’10 is a potential earnings risk,
but we would not expect it to hurt the 2010 EPS outlook by more than $0.03 per
share. For The Hartford (HIG), we see this as an inexpensive call option on the
equity market at 0.7x book. The company will benefit more than any other life
insurer if the equity market continues to rise, as capital related to variable annuity
guarantees would be unlocked.
Valuations and risks
Our target prices are based primarily on price-to-book multiples relative to
expected ROEs. Downside risks include deterioration in the equity and credit
markets, rating agency downgrades, and additional capital raises. Upside risks
include a continued equity market rally, further credit spread narrowing, higher
new money yields, easing of insurance regulations, and improved disclosure on
variable annuity living benefits.
Table of Contents
1Q’10 earnings preview .................................................................... 4
Aflac.......................................................................................................................................13
Genworth...............................................................................................................................15
The Hartford...........................................................................................................................17
Lincoln....................................................................................................................................19
Protective Life.........................................................................................................................21
Prudential ...............................................................................................................................22
Unum .....................................................................................................................................24
Valuation and risks ..................................................................................................................26