Zurich insurance is in talks to buy the us property and casualty insurance coverage unit of the latest york-based metlife, in accordance with a declaration through the swiss organization.
The offer could appreciate the company inside number of $4bn, according to people familiar with the negotiations, modern in a number of contemplated deals this is certainly reshuffling the global insurance coverage industry.
Metlife is mostly a life insurer, but features typically touted its home and casualty company for incorporating variation and smoothing on its functionality. in 2019, p&c accounted for 6 % of metlifes complete profits and 14 per cent of modified earnings.
In an email to customers, elyse greenspan, wells fargo insurance analyst, wrote that a $4bn price would-be equal to 14 times the woman estimate of 2021 profits from company to the high-end of the selection of costs which have been contemplated available in the market.
Metlife had been the eighteenth largest p&c insurer in the us, and zurichs united states subsidiary, farmers, could be the 7th biggest, she penned, adding that we would treat this deal favourably as metlife...has never gotten complete credit for the p&c company.
If metlife utilized the profits for a stock repurchase, it would be accretive toward companys earnings the following year, based on wells fargo computations.
Asked about the possibility of selling the p&c business on a conference telephone call with analysts earlier in the day this month, michel khalaf, metlife chief executive, called it a well-run, great business that had been consistently lucrative... plus it has a significant strategic link with our group business. but he would maybe not discuss a sale.
Metlife isn't the just diversified us insurer looking to streamline its product supplying. last thirty days, aig launched it in the pipeline to split up its term life insurance business from the larger home and casualty arm, a move long urged by investors. uks prudential can be seeking to split-off jackson, its us term life insurance business, under great pressure from activist buyer daniel loeb.
Met lifestyle shares have actually dropped 11 % to date this season, as investors have shied away from the finance industry as rates of interest have actually dropped. zurich shares have actually fallen 8 %.