MetLife, Inc. MET is well positioned to benefit from the robust group benefits business through which the company offers life insurance, dental benefits, individual disabilities, accident and health insurance, and vision offerings. With these products, the company was able to gain a foothold in the US group insurance market.
The importance of a comprehensive package of services was highlighted during the COVID-19 pandemic. Not only did the pandemic spark a global health crisis, it also created financial uncertainties that ranged from downsizing to global wages. As a result, it became the need of the hour for employers to change their benefit offerings, which existed in the pre-pandemic era as workers’ needs evolved with the coronavirus outbreak. Most employees have felt a sense of financial insecurity that may be resolved with tailored service offerings that best suit their personal needs. In addition to providing solid financial health, these deals are likely to help employees meet the inevitable health care expenses that the US has been struggling with for some time.
MetLife has repeatedly committed itself to introducing improved service solutions, as a comprehensive service program is an essential part of the well-being and satisfaction of employees. A satisfied workforce, in turn, should increase the productivity of the company. The same fact was further substantiated in MetLife’s 19th Annual U.S. Study of Trends in Employee Benefits, which shows the likelihood that employees, in adverse circumstances, will adapt and perform well in order to receive a benefit package that meets their needs, is 42% higher.
To expand the Group Benefits business, MetLife has acquired or partnered with established companies. Some notable examples of such initiatives in 2020 include the acquisition of one of the leaders in Vision Care Versant Health to enhance MetLife’s Vision Benefit offerings. Last year, MetLife expanded its alliance with PlanSource, known for offering cloud-based solutions designed to improve the performance management process for HR staff and employees.
The story goes on
While MetLife made efforts to get into the pet insurance space with the 2019 buyout of PetFirst, the company was also keen to break into the digital estate planning space, as evidenced by the acquisition of Willing itself that same year. These initiatives have helped MetLife emerge as the preferred choice for offering improved and newer group benefits to employers in the United States. The strong Group Benefits business, backed by expense margins, underwriting and volume growth, also contributed 41.4% of adjusted earnings for MetLife’s US segment last year.
This Zacks Rank # 3 (Hold) multiline insurer’s stocks are up 116.7% over the course of a year, compared to the industry’s 77.4% rally.
In addition, the importance of bespoke benefits was further reaffirmed by the MetLife study mentioned above. As boomers are closely monitoring the benefits to improving physical health in 2021, younger employees are increasingly focusing on improving their mental and financial wellbeing. In addition, 71% of boomers made it a priority that eyesight is a must. The number improved from 53% in the previous year. Since two out of five employees, according to the same study, still have a lack of suitable service offerings or programs, MetLife appears to take advantage of the prevailing scenario by introducing new service offerings.
Shares to consider
Some better-rated stocks in insurance include Old Republic International Corporation ORI, James River Group Holdings, Ltd. JRVR and Sun Life Financial Inc. SLF. While Old Republic has a Zacks Rank 1 (strong buy), James River Group and Sun Life Financial currently have a Zacks Rank 2 (buy). You can see The full list of today’s Zacks # 1 Rank stocks can be found here.
Old Republic, James River Group and Sun Life Financial report earnings surprises after four quarters averaging 65.8%, 11.6% and 18.2% respectively.
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MetLife, Inc. (MET): Free Stock Analysis Report
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