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MetLife (MET) Ups Stake in PNB Metlife to Boost India Presence

MetLife (MET) inks deal to purchase combined stake of IGE and Elpro in PNB MetLife. With increased stake in India's JV, the company intends to bolster its presence in India.

This story originally appeared on Zacks

MetLife, Inc. MET recently inked a share purchase deal with IGE (India) Private Limited ("IGE") and Elpro International Limited ("Elpro") as a result of which it will acquire IGE and Elpro’s combined shareholding of 15.3% in PNB MetLife India Insurance Company Limited ("PNB MetLife").

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MetLife operates its life insurance business in India through a joint venture (JV) with Punjab National Bank named PNB MetLife. It operates as one of the leading life insurance companies of India and boasts of a customer base of over 200 million stretched across 15,000 sales locations worldwide.

Coming back, completion of the latest transaction is subject to regulatory approvals. Once completed, the share of MetLife in PNB MetLife will rise to 47.3%.

The recent move is reflective of MetLife’s sincere efforts to extend and deploy capital across its India JV, which in turn, is expected to provide a boost to the JV’s growth. The company’s decision is a prudent one since PNB MetLife exhibits promising growth factors, a broad distribution network and holds a leading position in one of the most alluring life insurance markets in the world. Moves similar to the latest one not only accelerates distribution of MetLife’s life insurance products across India but also strengthens the company’s nationwide presence.

India’s life insurance market seems attractive, which MetLife can capitalize on. The market is expected to perform well in the days ahead, courtesy of factors highlighted by the data and analytics company GlobalData. The favorable demographic factors, expected economic turnaround in the second half of 2021 and an uptick in consumer awareness about life insurance policies are anticipated to drive the life insurance market in India. Notably, the Global Insurance Database of GlobalData expects the market to witness a CAGR of 7% over the 2019-2024 period.

The COVID-19 pandemic highlighted the importance of life insurance policies. With digitization permeating into most spheres of life, the life insurance industry has also been quick to embrace the trend. Case in point, customers can now purchase policies from the comfort of their homes through digital means. The life insurers shifted to a virtual sales environment, which is expected to disrupt sales figures to a certain extent amid persistent challenges stemming from the pandemic.

MetLife remains committed to bringing about technological developments aimed at offering a hassle-free insurance experience to customers. Recently, MetLife Bangladesh, through which the company operates in Bangladesh, teamed up with Citibank to offer a Host-to-Host (H2H) payment processing platform for assisting customers making online premium payments linked with life insurance policies. These technology advancements combined with others are expected to generate cost savings, speed up claim payments and result in automation of processes, which are cumulatively anticipated to provide a boost to the company’s margins in the days ahead.

Zacks Rank & Price Performance

Shares of MetLife, which currently carries a Zacks Rank #2 (Buy), have surged 62.6% in a year compared with the industry’s rally of 32.5%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Other Stocks to Consider

Some other top-ranked stocks in the insurance space are CNO Financial Group, Inc. CNO, Sun Life Financial Inc. SLF and Brighthouse Financial, Inc. BHF. While CNO Financial sports a Zacks Rank #1 (Strong Buy), Sun Life Financial and Brighthouse Financial carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings of CNO Financial, Sun Life Financial and Brighthouse Financial delivered a trailing four-quarter surprise of 26.12%, 12.11% and 15.40%, on average, respectively.

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