P&C Insurers Attract Investors with Higher Pricing Dynamic and Less Exposure to Interest Rates: Randy Binner, Managing Director, Discusses Investor Interest in the Segment with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - June 13, 2013 - The Wall Street Transcript has just published its Insurance Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Low Profitability and Low Interest Rates - Commercial Line Brokers and Underwriters - Consolidation Trends - Emerging Market Expansion - Analysis Of Personal, Commercial & Reinsurance Subsectors

Companies include: American International Group, (AIG), Hartford Financial Services Gr (HIG), The Travelers Companies, Inc. (TRV), Progressive Corp. (PGR), XL Capital Ltd. (XL), MetLife, Inc. (MET), Prudential Financial, Inc. (PRU), Lincoln National Corp. (LNC) and many more.

In the following excerpt from the Insurance Report, an expert analyst discusses the outlook for the sector for investors:

TWST: What is the level of investor interest in the insurance sector right now, and is investor sentiment largely in line with your view of the space? Where does it diverge?

Mr. Binner: Your first question was the interest, so as the interest in the insurance sector is always low - who wants to talk about insurance stocks? So I love covering the sector, because it's not well-followed, and it's not well-understood broadly, and so it's like people always kind of come to the insurance companies last. You see that with how the federal government's attempting to supervise MET (MET), PRU (PRU) and AIG. They don't have the resources, they don't have the expertise, and so it's a very slow progress.

I'd say that insurance companies are always a little bit below the radar, but in particular lately, I will say this again, especially life insurers. The life insurers have been in no man's land for a lot of the large institutional investors because of their interest rate risk. Life insurers have more exposure to low interest rates than any other publicly traded company, because if you think about it, they basically sell social insurance; they're like a pension fund with a discount rate that's been lowered.

And so I'd say that the sentiment on life insurers has been terrible. And I think that what you're seeing, like I said before, is a better economy, better stock market, yields are improving recently, but it's very low, and so I think we get people interested in cycling back into those names.

I think sentiment on the P&C side is pretty good. Property casualty lines are kind of easier to understand, like auto insurance rather than a variable annuity, from an investor perspective. And they don't have the interest rate exposure; they have the higher pricing dynamic. And so it's been easier for investors to be involved with P&C names....

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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