US life insurers' second-quarter earnings season was relatively uneventful compared to past quarters, but the period was generally marked by higher year-over-year results and fresh news regarding strategic moves for certain companies.
Many of the top publicly traded US life insurers saw an improvement in year-over-year earnings, a result in line with analyst expectations of a strong second quarter for the sector.
Among the group, MetLife Inc. saw considerable growth. The large insurer posted a second-quarter net income of $912 million, or $1.28 per share, a figure that is more than double its net income results of $370 million, or 48 cents per share, in the year-ago period. The company's adjusted earnings also improved year over year to $1.63 billion in the second quarter from $1.49 billion.
Prudential Financial Inc. also saw better results, with second-quarter after-tax adjusted operating income of $1.23 billion, or $3.39 per common share, up from $1.14 billion, or $3.09 per share, in the year-ago quarter. Net income attributable to the company was $1.20 billion, or $3.28 per common share, an increase from $511 million, or $1.38 per share, for the year-ago period.
New moves
Several life insurers used their earnings calls to explain their thinking on their business operations, including what types of strategic moves the companies might pursue.
During Prudential's second-quarter call, executives said the insurer is willing to expand its international footprint through mergers and acquisitions.
Andrew Sullivan, executive vice president and head of Prudential's international businesses and global investment management, said the company is "absolutely open to opportunistic, programmatic M&A," to quickly grow its presence in international markets. However, Sullivan noted that Prudential still sees organic growth as its top focus.
Meanwhile, Metlife has been investing in technology and leveraging its data with artificial intelligence, a move Metlife CEO Michel Khalaf said is helping boost revenue growth and efficiency.
Metlife has put about $1 billion of its expense capacity to use for growth initiatives and technology, which Khalaf said sets the insurer apart from its peers.
"We believe MetLife's large pool of data puts us in an advantaged position, with AI having the potential to act as a force multiplier and further widen the divide in our favor," Khalaf said.
Equitable Holdings Inc. reported on its earnings call that the insurer brought in $500 million during the second quarter by selling annuities through its partnership with BlackRock Inc. The investment company has a new program that embeds annuity options within 401(k) plans.
Equitable CEO Mark Pearson called the partnership a "key future growth opportunity," and noted that the company is also in talks to do something similar with other potential asset manager partners.
Globe Life Inc. executives spent the company's earnings call addressing allegations of misconduct made by short sellers as well as the nature of inquiries made by government entities.
Co-Chairman and co-CEO J. Matthew Darden said the US SEC and Department of Justice have not yet offered any claims against the company as a result of recent inquiries made by both groups nor have they indicated that they will.
Addressing commercial real estate exposure
Multiple insurers also fielded questions from analysts regarding their ongoing exposure to commercial real estate, particularly in the office sector.
In general, executives delivered assurances as they have in prior quarters to tamp down any lingering concerns about potential issues that may exist in insurers' portfolios.
For example, both Voya Financial Inc. and Equitable communicated that their office commercial real estate portfolios are manageable. Voya CEO Matt Toms called it a "story of resilience" and said he feels the overall market is starting to hit a "clearing level" for the troubled sector.