US life insurers are expected to report stronger second-quarter earnings due to favorable economic conditions, according to S&P Global Market Intelligence outlook.
Out of 15 US life insurers with available analyst estimates, 11 are predicted to show year-over-year increases in second-quarter earnings.
Additionally, 10 companies are expected to have higher earnings compared to the first quarter.
Brighthouse Financial has the highest second-quarter normalized earnings-per-share estimate at $4.37 among the group.
The second quarter has shown generally constructive trends for life companies, noted Ryan Krueger, an analyst at Keefe Bruyette & Woods. He highlighted “solid business growth,” “healthy capital return,” and “good expense control,” with life insurance stocks rising about 11% since the start of the year.
UBS analyst Brian Meredith predicted growth in individual and group annuity sales and continued premium growth for group benefits writers, along with improved mortality and morbidity experience.
The positive equity market performance in the second quarter will be beneficial though variable life insurers’ investment income may face challenges.
Analysts and investors are also monitoring Globe Life, which recently completed an independent investigation into allegations of misconduct.
The company’s audit committee found “no merit” in claims of wide-ranging insurance fraud. Globe Life has also received subpoenas from the US Justice Department regarding sales practices by certain agents. A spokesperson indicated further comments would be provided during the earnings call.
Most life insurers are also expected to report better revenue results for Q2 2024. Of the 15 insurers analyzed, only 4 shows weaker year-over-year revenue. 5 are expected to post lower revenues
Principal Financial Group Inc. is anticipated to see higher revenue year-over-year, with no change from the prior quarter, with a mean estimate of $3.80 bn.
MetLife is likely to book the highest second-quarter revenue among the 15 insurers, with a mean estimate of $18.57 bn.
CNO Financial Group is expected to post the lowest revenue among the group, with a mean estimate of $930 mn, lower than both the previous quarter and the prior-year period.
