Variable Annuity To Open Next Week Offering ETFs As Investment Options

Normally, variable annuities sold through insurance companies employ mutual funds.

But next week, what’s believed to be the first ETF-based variable annuity is set to hit the market, according to Daisy Maxey of Dow Jones Newswires.

The Variable Annuity for Roll Over Only Money, or Varoom, is being designed to let investors build a customized portfolio of subaccounts that invest directly in ETFs.

Varoom was created by the Integrity Life Insurance and National Integrity Life Insurance. Both are part of Cincinnati-based Western & Southern Financial Group.

The variable annuities will have 18 different ETFs from Vanguard and BlackRock’s (BLK) iShares unit.

“The fact that the subaccounts are investing directly in ETFs is unique,” Frank O’Connor, a Morningstar analyst, says. “Heretofore, we’ve only seen contract structures where ETFs are the underlying investment of a fund of funds.”

An example of such a fund-of-funds approach is Lincoln Financial Group’s (LNC) SSgA Global Tactical Allocation Fund, the report notes.

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AIG Stock's Unlikely Comeback

Once left for dead, shares of bailed-out American International Group Inc. have defied critics and rallied to become one of the market's top performers in 2010.

On Tuesday, AIG's publicly traded shares closed 45 cents lower at $58.93, capping a nearly 97% gain in the year to date and over 42% in December alone. The insurer is the fourth-best performer in the S&P 500 index this year.

AIG's gravity-defying performance has occurred as the company reached key milestones in its complex restructuring. It sold two large overseas units, shed risky businesses, regained access to the bond markets, and obtained new credit lines from banks to replace its funding from the government. Investors are now anticipating the U.S. will be able to sell a 92% stake in AIG, recoup its $182.3 billion bailout, and leave behind some value for private shareholders—an outcome that was highly improbable early in the year.

Now, there is even potential for upside after AIG completes its asset sales, which are expected to raise over $50 billion. The company is close to choosing a buyer for its Taiwanese unit, Nan Shan Life Insurance Co., which could fetch over $2 billion. Securities AIG acquired in a deal with MetLife Inc., and its remaining stake in pan-Asian insurer AIA Group Ltd., have also gained in value, notes Andrew Kligerman, an analyst at UBS Investment Research, who has a "neutral" rating on AIG. "AIG has lost luster given its global divestitures—but it is clearly still an important and prominent company," he said.

The stock move is deceptive in some regards. Each AIG share today used to be 20 shares before the company's near-collapse. If AIG hadn't conducted a reverse stock split last year, its share price would be about $2.95, compared with $57.94 three years ago. In December 2007, AIG had a market value of above $150 billion. Following its liquidity crisis and government rescue in 2008, the value of its common shares fell to a low of $1 billion in March 2009.

Today, private investors in AIG own common shares worth a total of $8 billion, and the current share price includes the value of warrants the company plans to issue to private shareholders. In the coming months, the Treasury Department intends to convert preferred AIG shares into over 1.6 billion common shares. All told, AIG has a total implied market value of over $80 billion, reflecting how it has slimmed down, but it remains a large insurer with a global property-and-casualty insurance business and a leading domestic life-insurance and retirement-services group.

Whether that $80 billion market value can be sustained over the next two years will depend on investors' willingness to buy AIG shares when the Treasury tries to unload its AIG ownership. To break even on its investment, the U.S. needs to sell its shares at above $30 apiece. If it sells at $45, taxpayers could earn a profit of over $20 billion. If the U.S. tries to sell too much too quickly, the stock price could still collapse.

AIG shares have gained despite bearish views of the company's value from some analysts and short-sellers.

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In late April, when AIG was trading around $44, Cliff Gallant, an analyst from Keefe, Bruyette & Woods, labeled the stock "grossly overvalued" and pinned a $6 price target on it. Even that target was "optimistic and somewhat implausible, requiring an exit of government interests which we believe may not be executable," he wrote in a report.

UBS's Mr. Kligerman that month estimated AIG's "fair value" at $31 a share. He placed a "neutral" rating on the stock and a $40 price target, which he said factored in a possibility that the government would restructure its stake in AIG at terms favorable to private shareholders.

Mr. Kligerman says he was quickly deluged by phone calls and emails from short-sellers, some from hedge funds betting against AIG. "They were furious," he recalls, adding he had never gotten so much negative feedback in his 16-year analyst career. "I had very heated arguments with some of them, and I wasn't even recommending that people buy the stock."

The following month, KBW's Mr. Gallant told a congressional oversight panel investigating the AIG bailout that the government would have difficulty recouping all its money. "If the taxpayer is expected to take a loss, how can there really be value here ... in the company?" he said, according to a transcript.

AIG Chief Executive Robert Benmosche spoke to the same panel in May. AIG is "worth a lot of money. I can't tell you how [others] do their analysis. But I am confident you're going to get your money plus a profit," he declared. Over the next few months, Mr. Benmosche was deeply involved in negotiations with the government over how the U.S. could exit its ownership without letting the stock collapse.

Bloomberg News AIG's gravity-defying performance has occurred as the company reached key milestones in its complex restructuring. Here, AIG's headquarters in New York.

On Nov. 15, Mr. Gallant raised his 12-month price target to $17.50 after AIG completed sales of its foreign life-insurance businesses and mapped out a plan to end its reliance on U.S. aid. He still sees many challenges ahead for AIG, including the "large obvious overhang" from the government's stake, his report said.

UBS's Mr. Kligerman, meanwhile, still has a neutral view on AIG, but recently raised his price target to $53, or about $44 excluding the value of warrants that company plans to give private shareholders as a sweetener.

In recent days, as AIG's share price climbed, Mr. Benmosche, who has been diagnosed with cancer but is hoping to see the government exit from AIG, said he has been thinking back to his testimony during daily three-mile runs.

"I was wondering if I might get a call from someone saying maybe 'you were right,' because we look better than we did last May and we can see the finish line from here, and it comes with a profit for the taxpayers," Mr. Benmosche said in an email. "But as I learned in [Ayn Rand's book] 'Atlas Shrugged,' find your Thank Yous from within."

Write to Serena Ng at serena.ng@wsj.com

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Slim Pension Fund Trails Citigroup With Treasury Bills

Marco Antonio Slim Domit, chairman and chief executive officer of Grupo Financiero Inbursa SAB, speaks during an event in Mexico City. Source: Grupo Financiero Inbursa SAB via Bloomberg

Dec. 30 (Bloomberg) -- Billionaire Carlos Slim’s Grupo Financiero Inbursa SAB is paying the lowest return among Mexican pension funds by keeping more than 50 percent of assets in local government bills, missing out on the biggest rally in longer-term debt since 2006. Bloomberg's Crayton Harrison reports. (Source: Bloomberg)

Billionaire Carlos Slim’s Grupo Financiero Inbursa SAB is paying the lowest return among Mexican pension funds by keeping more than 50 percent of assets in local government bills, missing out on the biggest rally in longer-term debt since 2006. Photographer: Jin Lee/Bloomberg

Marco Antonio Slim Domit, chairman and chief executive officer of Grupo Financiero Inbursa SAB, at an event in Mexico City. Source: Grupo Financiero Inbursa SAB via Bloomberg

Billionaire Carlos Slim’s Grupo Financiero Inbursa SAB is paying the lowest return among Mexican pension funds by keeping more than 50 percent of assets in local government bills, missing out on the biggest rally in longer- term debt since 2006.

The five funds of Afore Inbursa, as the pension division is known, returned an average 7.06 percent annually in the 36 months ended in November, trailing the more than 9 percent advance of top performing funds managed by ING Groep NV and Citigroup Inc., according to data from pension regulator Consar.

Slim’s group has 57 percent of its $9.6 billion in pension assets in government bills that mature in less than a year because it expects an expanding economy will prompt the central bank to raise interest rates, hurting longer bonds, Inbursa Chief Executive Officer Marco Antonio Slim Domit said. Mexican T-bills yield 4.12 percent to 4.77 percent while the 10 percent peso bond due in 2024 returned 16.3 percent this year, including reinvested interest, according to data compiled by Bloomberg.

“There are moments to be conservative and moments to be aggressive,” Slim Domit, who at 42 is the billionaire’s second- eldest son, said in a Dec. 17 telephone interview from Mexico City. “With interest rates, yes, we think that this is a moment to be conservative.”

Banco de Mexico, led by Governor Agustin Carstens, will hold the benchmark interest rate at 4.5 percent, the lowest since the bank started setting a target rate in 2005, through the end of 2011, according to a Dec. 20 survey of 18 economists by Citigroup’s Banamex unit.

Rates on Hold

Carstens said in a Nov. 10 interview he would consider cutting rates should rising foreign capital inflows cause the peso to appreciate and hurt exports. The Banamex survey shows economists expect a rate increase in January 2012.

In the U.S., which buys 80 percent of Mexico’s exports, the Federal Reserve is keeping interest rates near zero to stimulate the economy. U.S. growth will slow next year to 2.6 percent from 2.8 percent in 2010 while Mexico’s expansion will ease to 3.5 percent from 5.1 percent this year, according to the median estimate of economists surveyed by Bloomberg.

ING Afore, based in Mexico City, produced a 10.1 percent average return over the past 36 months, the most among Mexico’s 14 pension funds, according to Consar data. As of Nov. 30, ING had 21 percent of its 183 billion pesos of assets in inflation- linked bonds, 20 percent in fixed-rate bonds, 19 percent in equities and 0.05 percent in treasury bills.

Best Through Crisis

Citigroup’s Afore Banamex, whose average return was 9.4 percent in the period, had 23 percent of assets in inflation- linked bonds, 21 percent in fixed-rate government bonds and 16 percent in stocks, according to Consar.

Mexico’s inflation-linked bonds returned 10.9 percent this year through Dec. 29, including reinvested interest, according to Barclays Plc indexes. The benchmark IPC stock index rose 19 percent in the period.

Afore Inbursa’s preference for treasury bills helped it offer the highest returns among pension funds in late 2008 and early 2009 during the global economic crisis. The fund has held at least 45 percent of its assets in treasury bills since at least March 2008, according to Consar.

In January 2008, Slim Domit said in an interview Afore Inbursa would “go to the limit” on stocks if the benchmark IPC index fell below 20,000. Afore Inbursa boosted its stock allocation to 13 percent in September 2008 before beginning to reduce the following month, when the IPC tumbled to as low as 16,868.66. The equity allocation was 8.9 percent as of Nov. 30 and the IPC closed yesterday at 38,230.20.

‘Slow’

“This afore is well known for being relatively slow at moving into risky assets,” said Alonso Cervera, chief Latin America economist at Credit Suisse Group Ltd. in Mexico City.

The companies controlled by Carlos Slim, whose public holdings of $65 billion make him the world’s richest man according to Forbes magazine, have been taking advantage of low interest rates to raise money for investments. Mobile-phone carrier America Movil SAB sold more than $8 billion in bonds this year in Mexico, the U.S. and Europe. Inbursa raised $1.3 billion in the local bond market this year as it tripled branches from the end of 2008.

Grupo Financiero Inbursa, founded 45 years ago by 70-year- old Slim, had gained 41 percent this year before today, putting its market value at $14.5 billion. Grupo Financiero Banorte SA rose 22 percent. Inbursa fell 6 centavos to 53.70 pesos at 9:52 a.m. New York time in Mexico City trading.

While a “conservative” investment strategy makes sense in volatile markets or for workers who are close to retirement, funds dedicated to younger clients should have a mix of equities, structured products and infrastructure investments, said Gabriel Casillas, JPMorgan Chase & Co’s chief economist in Mexico City.

Client Losses

“In a period of recovery, or in the case of a person who has a long way before retirement, much better strategies can be chosen that incur more risk but probably are going to produce better returns,” said Casillas.

Inbursa’s pension fund for clients aged 26 and less has 42 percent of assets in Mexican treasury bills, compared with an average of 2.5 percent for the 14 funds in the system. Inbursa’s 0.5 percent allocation in fixed-rate bonds compares with an average of 29 percent for the pension industry.

Inbursa has lost about 32,000 pensioners this year for other funds, less than 1 percent of its client base, according to Consar data. The number of pensioners in the system rose 3.3 percent in the period, with ING Afore gaining 0.3 percent. Afore Banamex added 4.2 percent.

“It’s good that workers are taking more time to change accounts,” said Pedro Ordorica, president of regulator Consar. “This is a long-term saving system.”

To contact the reporters on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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Analyst Study on Lincoln National Corp. and Prudential Financial Inc. - Life Insurance Sector in a Tough Spot

{"s" : "lnc,pru","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Press Release Source: Wall Street Equity Research On Wednesday December 29, 2010, 7:57 am

JOHANNESBURG, SOUTH AFRICA--(Marketwire - 12/29/10) - www.wallstreetequityresearch.com brings investors market knowledge on the aspects moving the life insurance stocks, and offers complete analytical research on companies like Lincoln National Corp. (NYSE:LNC - News) and Prudential Financial Inc. (NYSE:PRU - News). Register with www.wallstreetequityresearch.com today to gain full access to our complimentary research on these life insurance stocks.

Both new regulatory concerns as well as low interest rates are poised to take their toll on the Life insurance industry which includes players like Lincoln National Corp. and Prudential Financial Inc. The Dodd-Frank Reform and Consumer Protection Act could prove to be a major regulatory factor as many companies within the sector such as Prudential Financial will fall beneath its blanket. The sector's biggest concern, however, is the environment of low interest rates. Investors can access free research on Prudential Financial Inc. and Lincoln National Corp. now by signing up at http://wallstreetequityresearch.com/December292010PrudentialFinancialInc.(PRU)291210.php or http://wallstreetequityresearch.com/December292010LincolnNationalCorp.(LNC)291210.php.

www.wallstreetequityresearch.com is a specialized website where investors can have specific access to complimentary reports on life insurance industry; traders looking for analysis on Lincoln National Corp., Prudential Financial Inc. and other players in the industry are welcomed to sign up for free at http://www.wallstreetequityresearch.com/.

Putting strains on profitability, low rates could force many companies to streamline their operations by trimming workforce, guarantees, and product offerings. In response to the low rates, the industry has been motivated to increase its holdings in corporate bonds, pushing the total corporate debt over $2 trillion. Also, companies are beginning to cancel their long-term care insurance programs because the aging population of baby boomers combined with longer life spans due to increased care options could potentially be an enormous drag on assets during the coming decades. Visit us at http://www.wallstreetequityresearch.com/ to understand the catalysts and forces driving or affecting companies in the life insurance industry.

High levels of uncertainty have caused Life Insurers to look everywhere for profits. While the industry is mired in uncertainty, acquisitions will likely be inhibited. However, some companies are working to expand their operations in Asian markets, especially Korea and Japan. China has proven to be a difficult market for the sector despite its 15% yearly growth. All foreign companies are essentially required to have local partners meaning this market with extremely low insurance penetration is actually struggling to show profits.

About Wall Street Equity Research:
Wall Street Equity Research looks to bring simplicity and highly sophisticated research to an ever-changing investing environment. Wall Street Equity Research has been partnering with a number of North American and Emerging Economies analysts to bring you the best of both continents in terms of market analysis and analytical opinions.

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Growing Market Share for MetLife Not Worth Cost in Profit Margins

Seeking Alpha var sector_slug = "financial"; by: Trefis December 29, 2010  | about: MET     Email Trefis Follow.author_sidebar__follow_button_initiator('trefis')Send Message

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MetLife (MET) provides a variety of insurance products, retirement plans and annuities in the US and around the world, primarily competing with providers like AIG (AIG), Hartford Financial (HIG) and Prudential Financial (PRU). MetLife, the largest life insurer in the US with total assets of over $539 billion in 2009, controls about 6% of the $330 billion US life & health insurance market.

We estimate that MetLife’s life and health insurance business in the US accounts for 37% of the $39.69 Trefis price estimate for MetLife’s stock. Our price estimate notably stands about 12% below the current market price.

Below we look at potential upside and downside scenarios for MetLife that focus on two key drivers to the company’s total value – market share and operating margins in its US life and health insurance business.

5% Upside – Gain in US Life and Health Insurance Market Share

MetLife has built a strong reputation in the US as a leading provider of life and health insurance. Its share in the US life and health insurance market has steadily increased over the past few years from 6.0% in 2006 to an estimated 6.4% in 2010 due to its wide distribution network consisting of partnerships with various banks, brokerage firms, and financial planners.

MetLife’s market share gains have continued at a steady pace while others have struggled to navigate the economic crisis. Competitor AIG witnessed brand erosion after seeking funds from the government, and saw its US life insurance market share fall from 2.0% in 2008 to below 1.3% in 2010. We project that this number will fall further to below 1.2% in 2011, before mounting a recovery.

MetLife, on the other hand, has continued to maintain customer confidence and could be positioned for market share upside beyond our estimates. There could be upside of roughly 5% to our price estimate for MetLife if the company is able to increase its US life and health insurance market share by 1 percentage point beyond our forecasts. The potential upside, however, would still leave our price estimate below market price.

12% Downside – Decline in US Life and Health Insurance Profit Margins

The life and health insurance market in the US is in a rapid growth phase, largely due to the aging baby boomer demographic. MetLife can stand to gain market share by targeting this population. However, in order to do so, MetLife would need to beat the competition on pricing, as cost remains the single most factor for potential life insurance customers. As the US life and health insurance remains highly competitive, beating the competition on pricing means sacrificing profit margins.

We currently forecast MetLife’s life and health insurance operating margin will remain stable at 12% through the Trefis forecast period. However, there could be a further 12% downside to our price estimate for MetLife if its US life and health insurance operating profit margins fall to about 8%, roughly in line with competitors AIG (8.4%) and Hartford Financial (8.1%).

Disclosure: No position

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How Much of a Bargain Is Aflac's Stock by the Numbers?

How Much of a Bargain Is Aflac's Stock by the Numbers? (AFL, HIG, MET, PRU) Fool.comInvestors Helping Investors Beat the MarketWelcome! Premium Advice My Services None Other Services Alpha Big Short Duke Street Global Gains Hidden Gems Income Investor Inside Value Million Dollar Portfolio Motley Fool Options Motley Fool Pro Rule Breakers Rule Your Retirement Special Ops Stock Advisor HelpJoin NoworLogin The Motley Fool Home All Fool Headlines Fool Labs Foolanthropy About The Motley Fool My Fool My Profile My Watchlist My Boards My CAPS My Reports My Settings How To Invest 13 Steps Find a Broker Investing Wiki Personal Finance Investing Commentary Basics ETFs Options Small-Cap Dividends & Income High Growth Value Mutual Funds International CAPS Community CAPS Home CAPS Home My CAPS Stocks Screener Players Blogs Top Tens Tags Contests Contact Us Help Retirement 13 Retirement Steps IRAs 401(k)s, Etc. Asset Allocation Boards Best Of Favorites & Replies Customize Start a New Board Fool Store Stock Advisor Hidden Gems Rule Breakers Income Investor Million Dollar Portfolio Motley Fool PRO Global Gains Email Print Tweet

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1 How Much of a Bargain Is Aflac's Stock by the Numbers? ByAnand Chokkavelu, CFA|More Articles
December 29, 2010|Comments (1)

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Numbers can lie -- but they're the best first step in determining whether a stock is a buy. In this series, we use some carefully chosen metrics to size up a stock's true value based on the following clues:

The current price multiples. The consistency of past earnings and cash flow. How much growth we can expect.

Let's see what those numbers can tell us about how expensive or cheap Aflac (NYSE: AFL) might be.

The current price multiples
First, we'll look at most investors' favorite metric: the P/E ratio. It divides the company's share price by its earnings per share (EPS) -- the lower, the better.

Then, we'll take things up a notch with a more advanced metric: enterprise value to unlevered free cash flow. This divides the company's enterprise value (basically, its market cap plus its debt, minus its cash) by its unlevered free cash flow (its free cash flow, adding back the interest payments on its debt). Like the P/E, the lower this number is, the better.

Analysts argue about which is more important -- earnings or cash flow. Who cares? A good buy ideally has low multiples on both.

Aflac has a P/E ratio of 12.5 and an EV/FCF ratio of 4.1 over the trailing 12 months. If we stretch and compare current valuations to the five-year averages for earnings and free cash flow, Aflac has a P/E ratio of 16.5 and a five-year EV/FCF ratio of 5.3.

A one-year ratio under 10 for both metrics is ideal. For a five-year metric, under 20 is ideal.

Aflac has a mixed performance in hitting the ideal targets, but let's see how it compares against some competitors and industry mates. 

Company

1-Year P/E

1-Year EV/FCF

5-Year P/E

5-Year EV/FCF

Aflac 12.5 4.1 16.5 5.3 MetLife (NYSE: MET) 14.5 9.1 14.7 7.7 Prudential Financial (NYSE: PRU) 5.9 8.4 11.5 7.6 Hartford Financial Services Group (NYSE: HIG) 7.3 6.4 16.5 4.0

Source: Capital IQ, a division of Standard & Poor's; NM = not meaningful.

Before you get too excited about the tiny free cash flow multiples, note that in the insurance industry, free cash flow isn't particularly useful. Insurance firms spend their money mainly on investments, not capital expenditures.

Numerically, we've seen how Aflac's valuation rates on both an absolute and relative basis. Next, let's examine ...

The consistency of past earnings and cash flow
An ideal company will be consistently strong in its earnings and cash flow generation.

In the past five years, Aflac's net income margin has ranged from 8.1% to 10.8%. In that same time frame, unlevered free cash flow margin has ranged from 29% to 33.5%.

How do those figures compare with those of the company's peers? See for yourself:

Source: Capital IQ, a division of Standard & Poor's; margin ranges are combined.

Additionally, over the past five years, Aflac has tallied up five years of positive earnings and five years of positive free cash flow.

Next, let's figure out ...

How much growth we can expect
Analysts tend to comically overstate their five-year growth estimates. If you accept them at face value, you will overpay for stocks. But while you should definitely take the analysts' prognostications with a grain of salt, they can still provide a useful starting point when compared to similar numbers from a company's closest rivals.

Let's start by seeing what this company's done over the past five years. In that time period, Aflac has put up past EPS growth rates of 8.8%. Meanwhile, Wall Street's analysts expect future growth rates of 11.9%.

Here's how Aflac compares to its peers for trailing five-year growth:

  

Source: Capital IQ, a division of Standard & Poor's; EPS growth shown.

And here's how it measures up with regard to the growth analysts expect over the next five years:

 

Source: Capital IQ, a division of Standard & Poor's; estimates for EPS growth.

The bottom line
The pile of numbers we've plowed through has shown us how cheap shares of Aflac are trading, how consistent its performance has been, and what kind of growth profile it has -- both on an absolute and a relative basis.

The more consistent a company's performance has been and the more growth we can expect, the more we should be willing to pay. We've gone well beyond looking at a 12.5 P/E ratio.

Aflac's been on my radar since this past summer when Dan Amos, the chairman and CEO of Aflac, visited Fool HQ. You can see my thoughts here.

If you find Aflac's numbers compelling, don't stop. Continue your due diligence process until you're confident that the initial numbers aren't lying to you.

Interested in reading more about any of these stocks? Add them to My Watchlist to find all of our Foolish analysis. And for more stock ideas, check out this recent article: "The 3 Biggest Fool.com Trends of 2010."

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Anand Chokkavelu doesn't own shares in any company mentioned. Aflac is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Aflac. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Report this Comment On December 29, 2010,at 11:22 AM, exdividendday wrote:

Aflac Incorporated is a general business holding company and acts as a management company, overseeing the operations of its subsidiaries. Its principal business is supplemental health and life insurance. AFL is definitely the best insurance company I have ever seen. The management did a great job. AFL is well positioned in its market and the business strategy works well. But AFL is not cheap. It has a current P/E ratio of 12.42 and the dividend yield amounts to 1.47 percent. I researched 7 additional life insurance companies that have the highest dividend yield within the industry. Here are my results:

http://long-term-investments.blogspot.com/2010/09/7-high-yie...

The average dividend-yield amounts to 3.38 percent while the average P/E ratio is 16.43. Price to book ratio is 1.39 and price sales ratio 0.93.

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Sending report... Today's Market updated Moments agoSponsored by:DOW11,570.54-14.84 -0.13%S&P 5001,258.69-1.09 -0.09%NASD2,665.11-1.82 -0.07% Most Popular Articlesin the last seven days 11 Lumps of Coal to Leave for Good One Stock David Gardner Thinks You Should Watch The Best 11 Predictions for 2011 5 Stocks to Sell for 2011 These Companies Will Profit from Intel's Demise 34 Expert Analysts Uncover Outstanding Dividend Plays The Best Dividend Stocks of 2011 The Pessimist's Guide to 2011 Will Apple Outperform in 2011? Make 2011 Your Best Year Ever Related Tickers12/30/2010 10:25 AMAFL$56.18-0.52-0.92%AflacCAPS Rating: HIG$26.44-0.08-0.30%Hartford Financial…CAPS Rating: MET$44.34-0.41-0.92%MetLife, Inc.CAPS Rating: PRU$58.61-0.34-0.58%Prudential Financi…CAPS Rating: Related ArticlesHow Cheap Is Prudential's Stock by the Numbers? - AFL12/15/2010 1:59 PM4-Star Stocks Poised to Pop: Manulife Financial - HIG12/7/2010 9:47 AMWill This Help You Retire Rich? - HIG11/22/2010 9:56 AMLow Rates Are Killing These Stocks - HIG11/12/2010 10:35 AMIs Hartford Financial the Perfect Stock? - HIG10/13/2010 11:23 AMThe Best Source for Retirement Income - MET10/13/2010 9:26 AM Community: Investing Wiki Term Of The Hour Current ratio: Current ratio is one of several metrics used to assess the financial health of a company. It is current assets divided by current liabilities. A value greater than 1.5 is desired.

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AIG Settles $146M Lawsuit

{"s" : "aig,fig,met,pru","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Zacks Equity Research, On Wednesday December 29, 2010, 1:10 pm EST

Recently, American International Group Inc. (NYSE: AIG - News) negotiated with the insurance regulators and settled a multi-state workers compensation probe for $146.5 million. This comprises about $100 million in fines and other penalties to resolve claims and about $46.5 million in additional taxes and assessments.

The litigation was filed by the insurance regulators who alleged that AIG and its affiliates had deliberately reported more than $2 billion of its workers compensation premiums as general or commercial automobile liability premiums. Moreover, the the norms were violated quite a number of times between 1975 and 1996, which finally caught sight of the regulators. Accordingly, the $100 million fine money will be shared by all 50 states in the US.

Other terms of the settlement also require AIG and its affiliates, who were involved in providing inaccurate financial data, will have to file restated financial statements by March 1, 2011, to reflect the reallocation and re-adjustments of the defrauded premiums. Further, the new settlement requires approval from 35 of the 43 states by March 1, next year. As of now, only about eight states have agreed in the US, one of whom – Massachusetts – will receive $3.4 million dollars from this settlement.

AIG will now be monitored by insurance regulators for at least a couple of years, and any deceit or breach would require an additional fine of up to $150 million, among other charges. This introduces an extraordinary compliance risk for the company.

However, despite the crisis, the $338 million held by AIG in escrow at the end of the third quarter will help the company fund the new settlement fine and taxes.

In 2006, AIG had also paid charges of over $1 billion in a lawsuit by federal prosecutors and securities regulators and New York prosecutors and insurance officials over a range of issues, including the underpayment of taxes on workers compensation premiums.

Nevertheless, the settlement negotiation is expected to shed off most of the litigation burden from AIG’s shoulders. This, in turn, will help the company focus on generating new operating efficiencies. AIG has already come a long way in restructuring its business in order to repay its $182 billion bailout loan that was taken by the US government during the peak of the financial crisis in 2008.

AIG’s prime restructuring includes execution of the recapitalization plan, successful IPO of AIG’s AIA Group Ltd. and asset disposals such as its ALICO unit to arch rival MetLife Inc. (NYSE: MET - News) Japan-based AIG Star and AIG Edison to Prudential Financial Inc. (NYSE: PRU - News) and AGF to Fortress Investment Group LLC (NYSE: FIG - News). The company is also negotiating for its Nan Shan unit Taiwan, while also intending to vend its rail-car leasing wing, AIG Rail Service Inc.

Moreover, AIG’s airplanes leasing unit, ILFC, is also posing recovery trends, thereby helping AIG regain its financial flexibility through several financial measures. After the repayment of $2 billion loan in October this year, ILFC also repaid $800 million to lenders last week, reported through a regulatory filing. The payment was made against the latest $2.5 billion credit agreement amendment so that the impairments charges recorded are not counted against the subsidiary in determining covenants.

AMERICAN INT'L GROUP NEW (AIG): Read the Full Research Report

METLIFE INC (MET): Read the Full Research Report

PRUDENTIAL FINL INC (PRU): Read the Full Research Report

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Independence Holding Company Announces Semi-Annual Cash Dividend

{"s" : "amic,ihc","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Press Release Source: Independence Holding Company On Tuesday December 28, 2010, 10:11 am EST

STAMFORD, Conn., Dec. 28, 2010 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE:IHC - News) today reported declaration of a semi-annual cash dividend of $0.025 per share of common stock, payable to stockholders of record on January 6, 2011, with a payment date of January 20, 2011.

About Independence Holding Company

IHC is a holding company principally engaged in the life and health insurance business and the acquisition of blocks of policies through its insurance company subsidiaries (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company) and its managing general underwriters, third-party administrators, and marketing affiliates. Standard Security Life markets medical stop-loss, small group major medical, short-term medical, major medical for individuals and families, limited medical, group long and short-term disability and life, dental, vision and managed health care products. Madison Life sells group life and disability, employer medical stop-loss, small group major medical, major medical for individuals and families, short-term medical, dental, vision, and individual life insurance. Independence American offers medical stop-loss, small group major medical, short-term medical, and major medical for individuals and families. IHC owns certain subsidiaries through its majority ownership of American Independence Corp. (Nasdaq:AMIC - News), which is a holding company principally engaged in the insurance and reinsurance business.

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SunPower Sells 44 MW Solar Plant

{"s" : "met,spwra","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Zacks Equity Research, On Monday December 27, 2010, 1:20 pm EST

SunPower Corp. (NasdaqGS: SPWRA - News) recently completed the sale of its 44 megawatt Montalto di Castro solar park to a consortium of international investors that include MetLife Inc. (NYSE: MET - News), Fondo PPP Italia and Voigt & Collegen.

The Montalto di Castro solar park, located in the Lazio region of Italy near Rome, was designed and built by SunPower. The company said it will continue to provide ongoing operations and maintenance services to the new owners.

With the completion and sale of this 44 megawatt (MW) power plant, SunPower has met the goal of developing, constructing and monetizing 72 megawatts from the Montalto di Castro solar park. 

SunPower constructed the Montalto di Castro solar park in four phases. The plant’s first 20-MW phase was connected to the grid in November 2009, several weeks ahead of schedule. The 8-MW second phase was commissioned earlier this fall, and the third and fourth phases, of the plant totaling 44 MW, were completed earlier this month. SunPower financed the development and construction of the third and fourth phases with proceeds from the solar industry's first-of-its-kind solar bond. 

Headquartered in San Jose, California, SunPower designs, develops, manufactures, markets and sells high-performance solar electric power technology products, systems and services worldwide for residential, commercial and utility-scale power plant customers. The company’s semiconductor-based solar cells and solar panels, which convert sunlight into electricity, are manufactured using proprietary processes and technologies.

SunPower's customer base is spread across North America, Europe, the Middle East, Asia and Australia. The company is proactive in entering new markets. By the end of fiscal 2011, the company expects its global dealer network to almost double to around 2,000 dealers.

SunPower currently has a short term Zacks #3 Rank (Hold). We maintain our Neutral recommendation on SunPower shares.

SUNPOWER CORP CL A (SPWRA): Read the Full Research Report

Zacks Investment Research

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Asia Markets: China talks down inflation after rate hike

By Michael Kitchen, MarketWatch

LOS ANGELES (MarketWatch) — Speaking one day after a surprise interest-rate hike, Chinese Premier Wen Jiabao said Beijing is confident that inflation is under control and that the public should be confident too.

Reuters
Headquarters of the People's Bank of China in Beijing.

Appearing Sunday on a radio call-in show for China National Radio, Wen warned a listener that “inflation expectations are more dire than inflation itself,” according to a report from the state-run Xinhua news agency.

Even after November’s consumer price index inflated at a 28-month-record-high rate of 5.1% from a year earlier, Wen urged people to remain confident and as government agencies act to stabilize prices, according to Xinhua.

Wen pointed to food and real-estate prices as major drivers of inflation, with agricultural prices of particular concern.

“The fundamental way to stabilize prices is to achieve a balance of supply and demand, which requires continuous development of agriculture,” Wen was quoted as saying.

As for China’s soaring property prices, he said, according to Xinhua: “In an interview last year, I had promised to maintain housing prices at a reasonable level in my term. I will not hold back but [will] continue working hard to realize this goal.”

The People’s Bank of China issued a statement Saturday on its website announcing the quarter-point interest-rate increases to both its one-year lending and one-year deposit rates.

The move, which went into effect Sunday, brought the lending rate to 5.81% and the deposit rate to 2.75%.

While many analysts had expected the central bank to raise its interest rates sometime in the coming months, the timing came as a surprise.

However, PBOC monetary-policy-committee member Li Daokui was cited in a separate state-media report as saying the choice of Christmas for the announcement was no accident.

Li said the holiday was “the right time” for the rate increase, since with Western financial markets closed, China would be able to avoid overreaction to the decision.

While Hong Kong’s stock market was closed Monday for a holiday, shares on the Shanghai Stock Exchange largely shrugged off the central bank’s hike, as a rally in insurers and some resource shares led the market solidly higher.

The Shanghai Composite /quotes/comstock/16k!i:000001 (CN:SHCOMP 2,835, -0.21, -0.01%)   added 0.7% in the morning session to trade at 2,854.90, with insurers among the gaining stocks.

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Asia Markets: China shares gyrate after rate hike

By Michael Kitchen, MarketWatch

LOS ANGELES (MarketWatch) — Chinese stocks rose sharply Monday morning, and then fell even more sharply Monday afternoon, as the share market reopened following a surprise interest-rate hike Saturday.

While Hong Kong’s stock market was closed for a holiday, shares on the Shanghai Stock Exchange at first seemed to cheer the move, with the Shanghai Composite /quotes/comstock/16k!i:000001 (CN:SHCOMP 2,781, -53.76, -1.90%)   rising more than 1% at one point during morning trade.

But the afternoon told a different story, as stocks reversed course sharply — with some of the leading advancers becoming the leading decliners. The Shanghai Composite closed 1.9% lower at 2,781.40.

Part of the turnaround was due to a fading rally among insurers. Shares of Ping An Insurance Group Co. /quotes/comstock/28c!e:601318 (CN:601318 55.78, -1.22, -2.14%)   /quotes/comstock/11i!piaif (PIAIF 10.45, -0.10, -0.95%)   ended down 2.2% Monday, after having jumped as high as 1.7% in the morning. Those of China Life Insurance Co. /quotes/comstock/28c!e:601628 (CN:601628 21.98, -0.27, -1.21%)   /quotes/comstock/13*!lfc/quotes/nls/lfc (LFC 61.29, -0.49, -0.79%)   lost 1.2% for the day, despite having ended the morning session 1.1% higher.

Various reports had attributed the earlier rise in insurance stocks to the rate hike itself, as insurers could benefit from higher bond yields in the coming year.

Relatives and loved ones of the victims of the 2004 Indian Ocean Tsunami observe the anniversary of the disaster that claimed over 226,000 lives. Video courtesy of Reuters.

China’s notoriously volatile airlines shares also followed the sell-off downward, with Air China Ltd. /quotes/comstock/28c!e:601111 (CN:601111 12.77, -0.27, -2.07%)   /quotes/comstock/11i!airy.y (AIRYY 21.87, -0.17, -0.77%)   closing 2.1% lower, and China Eastern Airlines Corp. /quotes/comstock/28c!e:600115 (CN:600115 6.60, -0.40, -5.71%)   /quotes/comstock/11i!cheaf (CHEAF 0.50, +0.03, +5.66%)   smacked down 5.6%.

Among the few winners were resource shares, helped in part by the possibility of government-sanctioned price hikes.

China Shenhua Energy Co. /quotes/comstock/28c!e:601088 (CN:601088 25.05, +0.02, +0.08%)   /quotes/comstock/11i!cuaef (CUAEF 4.15, +0.15, +3.75%)   managed to hold onto a 0.1% gain, though well down from its 2.8% leap in the morning. Jiangxi Copper Co. /quotes/comstock/28c!e:600362 (CN:600362 41.82, +0.47, +1.14%)   /quotes/comstock/11i!jixay (JIXAY 126.50, -0.75, -0.59%)   finished with a 1.2% rise in its value, easing from a morning rally of 3.2%.

The share action was almost a mirror image of what happened when the central bank last raised rates in late October — the first hike in almost three years. That time, mainland Chinese stocks had initially fallen as much as 2% but quickly regained ground. See report on stock market reaction to previous Chinese rate hike.

Still, Asian equity markets outside China largely ignored any concern about the dampening effects from the rate increase. Japan’s Nikkei Stock Average /quotes/comstock/11b!i:ni225 (JP:NI225 10,356, +76.80, +0.75%)   closed 0.8% higher, while India’s Sensex /quotes/comstock/28p!sensex (XX:SENSEX 20,074, +90.78, +0.45%)  added 0.2% in morning trade. However, South Korea’s Kospi (XX:$SEU 2,030, -7.93, -0.39%)   seesawed in and out of positive territory, ending 0.4% lower.

Australian and New Zealand markets were closed for a holiday.

Speaking one day after the rate hike, Chinese Premier Wen Jiabao said Beijing was confident that inflation is under control and that the public should be confident too.

Reuters
Headquarters of the People's Bank of China in Beijing.

Appearing Sunday on a radio call-in show for China National Radio, Wen warned a listener that “inflation expectations are more dire than inflation itself,” according to a report from the state-run Xinhua news agency.

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The Engineer Behind the MetLife, ALICO Deal

NEW YORK (TheStreet) -- Sometimes it takes a bit of rocket science to get a deal done. Lucky for MetLife(MET) senior vice president Sachin Shah-- the dealmaker behind the $15.5 billion acquisition of American International Group's(AIG) ALICO unit-- has experience building harpoons and missiles. Sachin Shah, senior vice president, MetLife

Shah stood side by side with William Toppeta, international president of MetLife and MetLife CFO Bill Wheeler when the insurer started discussions with AIG in 2008.

"We saw what was an unbelievable opportunity. We did compete with [AIG's ALICO] in many markets and never thought this was a company we could acquire. We very quickly tried to seize the opportunity and it took a little longer than expected," Shah says.

Shah, who joined MetLife in 1999, says his prior jobs-- engineering missiles, elevators, and back office and trading operations -- have helped prepare him for the pressure involved in completing the transaction.

"My specialty is figuring out complex problems. I was quickly fansinated with the business side," he said. "This was not your normal sale. We had to work with them to very quickly to prepare the divestiture of these assets. There was a lot of complexity involved in this; ensuring this was the right answer for AIG."

As the dealmaker in charge of leading the integration, Shah has put together an integration team consisting of 30 different sub-teams that are working on fully integrating ALICO's distribution systems, technology, branding and marketing across 64 countries in 18 months.

Shah spends most of his day collaborating with people from different businesses in both MetLife and ALICO on the best way to drive change in the organization. He says the most difficult part of his job is making the right decisions quickly.

"You are always moving fast and you are always striving to balance speed versus perfection at minimal risk. Just finding enough time to ensure that every decision we are making is the best decision we are making," Shah explains, saying he has been frequently traveling and has had very few weekends free. "The stakes are now much higher and we are in markets that we had no presence in before. We have had to move very quickly. I stressed over that a lot."

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Life Insurers Face Regulation, Rate Fears

NEW YORK (TheStreet) -- 2011 is likely to be a challenging year for the life insurers because of increased regulation the threat of declining interest rates, says Doug French, principal at Ernst & Young.

"It is definitely not going to be back to normal in 2011. This year is going to be more challenging than 2010. There is no end in sight for challenges," said French.

One key regulatory factor that will weigh down the life carriers are the Dodd-Frank Wall Street Reform and Consumer Protection Act. French explains that the Dodd Frank Act will impact those insurers that own banks, such as Prudential(PRU) and MetLife(MET). Other life insurers that are considered "systemically significant" or those that frequently trade in derivatives could also fall under the Dodd-Frank regulations.

Besides the regulatory environment, low interest rates will also pose a threat to insurers' balance sheets, French added. "When the interest rate is down you are focused on expense reduction and operational efficiency, and that could mean putting off projects, cutting headcount and you will see an uptick in product redesign and the re-pricing of products," French said.

Products that insurers are most likely going to change because of interest rate declines are long term care products and no-lapse guarantee features in universal life. "You are going to have to develop products that have weaker guarantees for the customer, so you will see things like long term care benefit riders on annuities. It is basically a way to share risk with the customers. There will also likely be a weakening of guarantees or raising of premiums," French said.

French adds that due to the volatility and uncertainty in the market insurers won't be making that many acquisitions.

"People are still pretty conservative with the balance sheets. You are going to see and hear stuff, but I'm not sure you are going to see many deals get done in 2011," said French.

--Written by Maria Woehr in New York.

To contact the writer of this article, click here: Maria Woehr.

To follow the writer on Twitter, go to http://twitter.com/newsgirlmw.

To submit a news tip, send an email to: tips@thestreet.com.

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MetLife Alters Comp to Avoid Berkshire

NEW YORK (TheStreet)-- MetLife(MET) changed its compensation guidelines for senior executives in order to avoid comparisons to Warren Buffett's Berkshire Hathaway(BRK.A).

MetLife's compensation committee made the change after Berkshire Hathaway was added to the Standard & Poor's Insurance Index, which is used by MetLife to determine appropriate pay for senior managers.

But since Berkshire has a large portion of its business outside of the insurance and the financial services industry -- such as Burlington Northern Santa Fe -- MetLife's compensation committee determined the inclusion would throw off MetLife's compensation metrics.

"Without this prospective change, BHI would comprise a disproportionate component of the Insurance Index Comparators, representing over 40% of the total market capitalization of the Insurance Index Comparators as of October 21, 2010," said the SEC filing.

Berkshire has a 31 percent weighting in the S&P 500 Insurance Index, while MetLife has a weighting of 9.1 percent, according to Bloomberg.

MetLife's CEO Robert Henrikson made $11.6 million in total compensation last year, according to a March proxy filing.

--Written by Maria Woehr in New York.

To contact the writer of this article, click here: Maria Woehr.

To follow the writer on Twitter, go to http://twitter.com/newsgirlmw.

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Lincoln Financial Group Names Randal J. Freitag Chief Financial Officer

{"s" : "lnc","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Press Release Source: Lincoln Financial Group On Thursday December 16, 2010, 4:30 pm EST

PHILADELPHIA, Dec. 16, 2010 /PRNewswire-FirstCall/ -- Lincoln Financial Group (NYSE:LNC - News) today announced that it has promoted Randal J. Freitag to Executive Vice President and Chief Financial Officer, effective January 1, 2011. As CFO, Freitag will replace Frederick J. Crawford, who as previously announced will now assume the newly created position of Executive Vice President and Head of Corporate Development and Investments. Freitag and Crawford will both serve on the company's Senior Management Committee and report to Dennis R. Glass, President and Chief Executive Officer of Lincoln Financial.

"We conducted a thorough internal and external search which confirmed that Randy is the best candidate based on his deep experience in all aspects of the CFO role as well as his broad perspective on the industry's dynamics and ongoing evolution," said Glass. "Randy's background in the industry and with Lincoln's businesses, his strategic insights, demonstrated business judgment, and strong internal and external relationships will support the long-term success of the enterprise."

As Chief Financial Officer, Freitag will lead Lincoln's financial team, which includes corporate finance, risk management, treasury, corporate tax, corporate actuarial, audit and investor relations. In addition, he will work closely with senior leaders throughout the company to develop strategies to position Lincoln Financial for the future.

Freitag developed his well-honed analytical and technical skills by serving in a number of  increasingly responsible roles at Lincoln Financial since joining the company in 1995. He was named Chief Risk Officer in 2007 with overall responsibility for enterprise risk management, capital and liquidity management, equity risk management and treasury. Prior to serving as Chief Risk Officer, Freitag was senior vice president of product risk & profitability management for the individual life and annuities businesses. His areas of responsibility included financial management, asset liability and equity risk (variable annuity hedging) management. Freitag has also served in the corporate actuarial area where his role included mergers & acquisitions, rating agency relations and capital allocation. Prior to joining Lincoln Financial, Freitag held various actuarial roles. He earned a B.A. degree in Mathematics from the University of Minnesota and is a fellow of the Society of Actuaries.

About Lincoln Financial Group

Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC - News) and its affiliates. With headquarters in the Philadelphia region, the companies of Lincoln Financial Group had assets under management of $150 billion as of September 30, 2010. Through its affiliated companies, Lincoln Financial Group offers: annuities; life, group life and disability insurance; 401(k) and 403(b) plans; savings plans; and comprehensive financial planning and advisory services. For more information, including a copy of our most recent SEC reports containing our balance sheets, please visit www.LincolnFinancial.com.

(Logo:  http://photos.prnewswire.com/prnh/20050830/LFLOGO )

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Sun Life Financial welcomes milestone reached at Finance Ministers' pension meeting

{"s" : "slf,slf.to","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Press Release Source: Sun Life Financial Inc. On Monday December 20, 2010, 5:24 pm EST

Proposal for voluntary, privately-run option would significantly expand retirement savings plan coverage for working Canadians

TORONTO, Dec. 20 /PRNewswire/ - Sun Life Financial Inc. (TSX/NYSE: SLF) welcomes the outcome of the Finance Ministers' meeting, which concluded today in Kananaskis, Alberta.

"Sun Life Financial commends the Finance Ministers for moving forward with a framework for large, pooled registered pension plans," said Chief Operating Officer Dean Connor. "We believe that it is in the public interest to help people save at work. By targeting current gaps, Canadians will have access to a retirement savings option not currently available."

According to Connor, the advantage of saving at work was aptly described by a pension plan member who participated in a recent Sun Life Financial survey:

"When the money comes off your paycheque, you don't miss it. But if you didn't have this option and it had to be deducted from your bank account, it's more visible and sometimes hurts given so many other priorities."

"The Finance Ministers' proposal would allow small and medium-sized businesses to better provide access to low-cost retirement savings options for their employees, and alleviate employers of many of the responsibilities and costs associated with providing a plan, which will now be borne by a regulated financial institution," said Connor.

Connor said the outcome is an important part of the overall reform package, which also includes a focus on financial literacy. "The proposed reforms reflect an equitable balance of responsibility among individuals, employers and government that is key to the success of Canada's retirement system."

"Sun Life remains committed to working with government and stakeholders in order to arrive at the best possible retirement solutions for Canadians," said Connor. "We encourage all levels of government to work together to move this proposal forward."

About Sun Life Financial

Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of September 30, 2010, the Sun Life Financial group of companies had total assets under management of $455 billion. For more information please visit www.sunlife.com.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.

Note to Editors: All figures in Canadian dollars.

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Monday Night Football May Be TCF Win

NEW YORK (TheStreet) -- Minnesota-based regional bank TCF Financial (TCB) has stumbled into a publicity gold mine by having its college-sponsored stadium snowball into hosting NFL Monday Night Football.

"Let's face, we've had a week," says Jason Korstange, senior vice president of corporate communications. "You need to react to as many things as are happening around you. And we have."

After the roof collapse last week at Minneapolis-based Metrodome -- home of the Minnesota Vikings -- the National Football League approached the University of Minnesota about scheduling the Vikings and Chicago Bears' matchup at TCF Bank Stadium.

TCF purchased the naming rights, along with other university sponsored activities, for $35 million in 2005.

TCF's stumble into NFL naming rights is quite a bargain compared to other sponsorship deals. For example, Lincoln National (LNC) paid the Philadelphia Eagles $139.6 million for naming rights for its stadium in a 20-year deal.

But the opportunity is not without risk. The same storm that collapsed the Metrodome roof also dumped several inches of snow at TCF Bank Stadium. Korstange explained that the bank purchased 700 shovels along with t-shirts emblazoned with the TCF logo for paid volunteers to dig the field out from underneath the storm.

While TCF is happy with the opportunity for a prime time spot on national television, the week also brought bad news for the bank that has been fighting the proposed limitations on interchange fees.

Last week the Federal Reserve cut debit interchange fees as much as 70% as part of its implementation of the Durbin amendment included in this summer's financial reform package. In October, TCF filed a lawsuit challenging the constitutionality of the Durbin amendment.

The bank remains unfazed by the Durbin announcement.

"We were not surprised [by the Fed announcement] and we fully believe that we will win that lawsuit," Korstange says.

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Long-term Care Insurance at a Crossroads

BOSTON (TheStreet) -- The observance of "National Long-Term Care Awareness Month" in November came as two major insurance companies retreated from the industry, dramatically shrinking their role in it.

There are new products on the way that could serve as replacements, but for those approaching retirement, or considering a long-range plan, the troubles facing this marketplace are cause for concern.

Given longer life spans and the massive number of baby boomers retiring over the next decade, the potential for asset-ravaging care needs is an often neglected but no less important planning need.

In a sign of industry troubles, insurers such as MetLife are discontinuing some or all sales of long-term care insurance policies.

Retreats
On Nov. 11, MetLife(MET) announced that it will discontinue the sale of new long-term care insurance policies as of Dec. 30. Existing customers will not be affected and, "as long as premiums are paid on time, coverage cannot be canceled," the company assured.

"While this is a difficult decision, the financial challenges facing the LTCI industry in the current environment are well known," said Jodi Anatole, vice president of long-term care products for MetLife, in a statement.

On the heels of that announcement, another dominant underwriter, John Hancock, moved away from the business of selling LTCI policies to companies who offer them as an employee benefit. It will now sell policies only to individuals. It has also sought as much as a 40% premium increase in some states.

Despite the potential that a vast number of aging boomers could benefit from LTCI, products offered by such companies as Prudential(PRU), New York Life, Northwestern Mutual, Mass Mutual and State Farm are underused. Sales were down by nearly one-fourth last year and, according to industry statistics, a mere 7 million policies are active.

The American Association for Long-Term Care Insurance, an industry trade group, estimates that roughly 10 million Americans need long-term care, with annual expenditures exceeding $200 billion.

A sense of the economic impact is also laid out in research by Genworth Financial(GWN) showing that long-term care costs have outpaced inflation.

In 2005, the median annual rate for a private nursing home was $60,225, it said in its latest Cost of Care Survey. The rate this year was $75,190 -- a 4.5% compound annual growth rate. The company's website features an interactive map designed to help consumers see a variety of long-term care costs in their home state.

"Aging baby boomers are going to put enormous pressure on the health care system 20 years from now, when they might need long-term care, however defined," says Martin A, Corry, director of Federal Health Policy for Buchanan Ingersoll & Rooney, a firm with 450 attorneys and government relations professionals. "People who otherwise would have died from an injury or illness are not going to."

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636 Prudential Employees and Retirees Earn More Than $400,000 in Grants for Nonprofits in Their Communities Through 19th Annual Prudential CARES Volunteer Grants Program

{"s" : "pru","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Press Release Source: Prudential Financial, Inc. On Monday December 20, 2010, 4:27 pm EST

NEWARK, N.J.--(BUSINESS WIRE)-- The Prudential Foundation and Prudential Financial, Inc. (NYSE:PRU - News), recently provided more than $400,000 in Prudential CARES Volunteer Grants to 589 community organizations in the United States and another 47 internationally. Grants range from $250 to $5,000 for each award winner’s charitable organization.

“Through volunteer work with fire departments, food banks, youth sports programs, arts and cultural organizations and in local schools, Prudential employees around the world are giving nonprofit organizations in their communities the gifts of their time, talent and treasure,” said Gabriella Morris, vice president of Community Resources at Prudential and president of The Prudential Foundation.

“Our Prudential CARES Volunteer Grants program is now in its nineteenth year. There is no more significant way for us to demonstrate Prudential’s continued commitment to supporting volunteerism than to put dollars into the organizations where our volunteers serve,” said Morris. “Prudential employees and retirees continue to amaze and inspire us with their. Many tell us that the time they devote to their causes feels more like receiving a gift than giving one,” adds Morris.

The Prudential Foundation is a not-for-profit corporation supported by The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. To promote sustainable communities and improve social outcomes for community residents, The Prudential Foundation focuses its grant making strategy in the areas of education, economic development and arts and civic infrastructure. In addition, the Foundation also supports the community engagement efforts of Prudential employees through Matching Gifts and other special programs that recognize their volunteer efforts. The Prudential Foundation is a unit of Prudential’s Community Resources Department, which also includes the Social Investment Program, which originates and manages socially beneficial investments; and Local Initiatives, which coordinates employee volunteerism and fosters community outreach.

Prudential Financial, Inc. (NYSE:PRU - News), a financial services leader with approximately $750 billion of assets under management as of September 30, 2010, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, investment management, and real estate services. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit http://www.news.prudential.com/.

Editor’s Note:

The Prudential CARES logo is immediately available upon request and Prudential Financial executives are available for interview to discuss this release and additional community outreach efforts by contacting Laura Bennett, Bennett & Company Marketing, 407-478-4040 or laura@bennettandco.com.

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Genworth Financial Declares Dividend on Its Shares of Series A Cumulative Preferred Stock

{"s" : "gnw","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Press Release Source: Genworth Financial On Friday December 17, 2010, 3:44 pm EST

RICHMOND, Va., Dec. 17, 2010 /PRNewswire-FirstCall/ -- The Board of Directors of Genworth Financial, Inc. (NYSE:GNW - News) today declared a quarterly dividend of $0.65625 per outstanding share of its Series A Cumulative Preferred Stock. The dividend is payable March 1, 2011 to stockholders of record as of the close of business on February 14, 2011.

Genworth's Series A Cumulative Preferred Stock is not listed on any securities exchange.

About Genworth Financial

Genworth Financial, Inc. (NYSE:GNW - News) is a leading Fortune 500 global financial security company.  Genworth has more than $100 billion in assets and employs approximately 6,000 people with a presence in more than 25 countries.  Its products and services help meet the investment, protection, retirement and lifestyle needs of more than 15 million customers.   Genworth operates through three segments: Retirement and Protection, U.S. Mortgage Insurance and International. Its products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists.  Genworth Financial, which traces its roots back to 1871, became a public company in 2004 and is headquartered in Richmond, Virginia.   For more information, visit Genworth.com.  From time to time Genworth releases important information via postings on its corporate website.  Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings.  Enrollment information is found under the "Investors" section of Genworth.com.  

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Delphi Financial Obtains New Bank Credit Facility

{"s" : "dfg","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Press Release Source: Delphi Financial Group, Inc. On Thursday December 23, 2010, 7:00 am EST

WILMINGTON, Del.--(BUSINESS WIRE)-- Delphi Financial Group, Inc. (NYSE:DFG - News) today announced that it has entered into a new $300 million bank credit facility, which replaces the Company’s existing $350 million facility that was scheduled to expire in October 2011. The new facility consists of a $175 million three-year revolving credit facility and a $125 million five-year term loan. Bank of America Merrill Lynch and U.S. Bank National Association acted as joint lead arrangers and book managers for the new credit facility.

Robert Rosenkranz, Chairman and Chief Executive Officer, said, “Our new bank facility, combined with the previously announced full redemption of our 8% Senior Notes that is being completed today, will provide Delphi with enhanced financial flexibility while reducing our interest expense. Delphi is well positioned to support the growth of our insurance businesses and take advantage of future growth opportunities.”

Delphi Financial Group, Inc. is an integrated employee benefit services company. Delphi is a leader in managing all aspects of employee absence to enhance the productivity of its clients and provides the related group insurance coverages: long-term and short-term disability, life, excess workers’ compensation for self-insured employers, large casualty programs including large deductible workers’ compensation, travel accident, dental and limited benefit health insurance. Delphi’s asset accumulation business emphasizes individual annuity products. Delphi’s common stock is listed on the New York Stock Exchange under the symbol DFG and its corporate website address is www.delphifin.com.

In connection with, and because it desires to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Delphi cautions readers regarding certain forward-looking statements in the foregoing discussion and in any other statements made by, or on behalf of, Delphi, whether in future filings with the Securities and Exchange Commission or otherwise. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results, prospects, outlooks or other developments. Some forward-looking statements may be identified by the use of terms such as “expects,” “believes,” “anticipates,” “intends,” “judgment,” “future,” “outlook,” “effort,” “attempt,” “achieve,” “project,” or other similar expressions.

Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic, competitive and other uncertainties and contingencies, many of which are beyond Delphi’s control and many of which, with respect to future business decisions, are subject to change. Examples of such uncertainties and contingencies include, among other important factors, those affecting the insurance industry generally, such as the economic and interest rate environment, federal and state legislative and regulatory developments, including but not limited to changes in financial services, employee benefit, health care and tax laws and regulations, changes in accounting rules or interpretations thereof, market pricing and competitive trends relating to insurance products and services, acts of terrorism or war, and the availability and cost of reinsurance, and those relating specifically to Delphi’s business, such as the level of its insurance premiums and fee income, the claims experience, persistency and other factors affecting the profitability of its insurance products, the performance of its investment portfolio and changes in Delphi’s investment strategy, acquisitions of companies or blocks of business, and ratings by major rating organizations of Delphi and its insurance subsidiaries. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, Delphi. Forward-looking statements contained in the foregoing discussion are made as of the date of this press release and Delphi disclaims any obligation to update these or any other forward-looking statements.

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MetLife Changes Pay Rules to Spare Comparison With Buffett

Metlife Inc. Chief Executive Officer Robert Henrikson. Photographer: Ramin Talaie/Bloomberg

MetLife Inc., the biggest U.S. life insurer, changed its compensation guidelines to spare top executives from pay comparison with their counterparts at Warren Buffett’s Berkshire Hathaway Inc.

The compensation committee will exclude Berkshire when determining how many shares to award its managers, New York- based MetLife said Dec. 17 in a regulatory filing. MetLife said the change was made after the Standard & Poor’s Insurance Index, which the company uses to help determine appropriate pay, added Omaha, Nebraska-based Berkshire. Morningstar Inc.’s Footnoted reported the exclusion earlier today.

MetLife Chief Executive Officer Robert Henrikson, 63, had $11.6 million in total compensation last year and $22.5 million in 2008, according to MetLife’s proxy filing in March. Buffett, Berkshire’s 80-year-old CEO, had total compensation of $175,000 in each of the last two years. Berkshire, which owns energy, railroad and luxury units, generated 49 percent to 61 percent of its profit from insurance businesses in the past five years.

“Given the size of BHI, and the diversity of its business outside of insurance and financial services, the Compensation Committee concluded it is appropriate to exclude BHI from the Insurance Index Comparators for future awards in order to yield an appropriate peer comparison,” MetLife said in the filing.

Berkshire Chief Financial Officer Marc Hamburg was the highest paid executive listed on the firm’s proxy last year with compensation of $874,750. MetLife reported 2009 compensation of more than $3 million for at least six managers.

Christopher Breslin, a spokesman for MetLife, declined to comment.

Berkshire’s Class B shares were added to the S&P 500 Index in February after Buffett split the stock and completed his $26.5 billion acquisition of railroad Burlington Northern Santa Fe. Berkshire has a 31 percent weighting in the S&P 500 Insurance Index, according to Bloomberg data. MetLife has a weighting of 9.1 percent.

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net.

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Stargaze

MAYHILL, N.M.—My daughter and I flew to New Mexico to watch the night sky. It didn't disappoint.

Joanna Davis The rolling hills around New Mexico Skies. The ridges help block light from El Paso about 125 miles away

On a moon-less fall night, the sky was painted with stars and ribbons of light so brilliant they looked like clouds. Jupiter was the brightest object, a beacon that outdid the North star. The light from the Milky Way cast shadows on the ground.

Quite a show for a city boy like me who rarely thinks to look up at the sky at night.

Lynn and Mike Rice a pair of 68-year-olds, run what they call a bed-and-telescope for serious stargazing on a hilltop in the Lincoln National Forest, a 2 ½ hour drive north of El Paso. The guests include astronomers hunting asteroids and novices who couldn't see a constellation if it were painted in the sky with a glow-in-the-dark marker. New Mexico Skies isn't like other B&Bs. First, there's no breakfast, so you have to cart in your own food and drink. "Who knows when an astronomer would want to eat," says Mrs. Rice. "They're up all night."

Second, there are no glare-producing white lights outside the lodge's seven cabins, which would dim the view of the sky. Instead there are red lights everywhere—even the refrigerator bulbs are red— and you stumble around the grounds at night using red-bulb flashlights until your eyes get used to the dark skies.

New Mexico Skies rents guests telescopes for about $175 night—big ones that cost $50,000 a piece—and has a small staff eager to instruct beginners. It also rents retractable white domes for 30 remotely-operated telescopes. It makes for an odd scene. The domes come to life in the dark, whirring and swiveling, like big R2D2's, as astronomers somewhere are positioning their telescopes for a night's work.

I've been intrigued with starry nights skies since I studied abroad in Israel in 1972, camped out in the Sinai, and was awed by star show overhead. My 22-year-old daughter Joanna had a similar experience in the Namibian desert in 2009 during her study-abroad stint in South Africa. When Mike Rice told us that the Milky Way was so bright during the summer that you could read a book by the light, we were hooked and booked a weekend stay.

The first night, we learned how to use a 10-foot tall, computer-controlled telescope, shaped like an artillery cannon. It turned out be simpler to control than the little tripod-mounted telescope I had as a kid, which I only managed to focus on the moon and my neighbor's windows. Programmed into this one, with its 30-inch mirror and 150-fold magnification, were the location of 100,000 galaxies, stars and planets. Punch the name into the handheld controller and the telescope's motors pointed the contraption in the right direction.

Johanna Davis M-57, the planetary nebula, as seen through a telescope with a 30-inch mirror and 150-fold magnification.

Through the telescope's eyepiece, M-17, the omega nebula, appeared as a small cloud, which Mike Rice explained to us were gasses that would eventually turn into stars – "a star nursery," he called it. M-57, a planetary nebula, was odder. It looked like a smoke ring surround a spec of light, which was actually the remains of a star that had exploded and released gasses that formed the peculiar circular shape. "It wasn't like anything I had ever seen before," my daughter said later..

After taking early retirement as vice chancellor at the University of Alaska Fairbank, Mr. Rice hunted the southwest for the right setting to pursue his longtime interest in astronomy. The 50-acre site near Mayhill was especially good because the area is sparsely populated and the ridges block out stray ground lights, while the high-altitude location (7,300 feet) and arid climate keep the air unperturbed.

The vantage point is so pristine that a half-dozen spectacular shots taken at New Mexico Skies have wound up on the National Aeronautic and Space Administration's "Image of the day" website, which is kind of like a Playboy calendar for astronomers, except the pictures are of celestial bodies.

Mr. Rice didn't mind the warmer weather either. Alaskan astronomers risk getting their eyes stuck to a telescope's eyepiece during the brutal winters, he told us. What then? "Don't panic," he says. Eventually the eye's warmth heats the eyepiece enough to unstick the unlucky astronomer.

To me, the most exciting view was Jupiter. Through the eyepiece, we could clearly see bands of clouds crossing the planets surface and four of Jupiter's moons. Magnified, the light from the planet was so powerful that my head snapped back when I looked. Galileo had seen a fuzzier version of the scene with a far simpler telescope, hundreds of years earlier. If anything, that made the scene sweeter.

We hadn't come for anything as high faulting as a quest of discovery –- we just wanted to have a cool time way off the usual tourist trail. But that first night you couldn't help but realize the limitations of the body. It took a powerful telescope to reveal to us the peculiarities and beauty that our eyes couldn't see. The second night we realized the limitations of even the telecope's technological boost.

Joanna Davis M-27, a gaseous formation, which was photographed through 'imaging,' a process of taking photos of distant objects

That's when we had our first lesson in "imaging" – that is, taking photos of distant objects. Randy Reimers, a former high school computer teacher, showed us how to run a telescope with a 16-inch mirror and color camera connected to a computer screen displaying a map of the night sky. Joanna moved the cursor over M-27, a gaseous formation usually described as having a dumbbell shape, but which looked to me more like bowtie. The telescope moved into position.

Then she aimed a second telescope-mounted camera at a nearby star, which became a guide post to keep the telescope focused on M-27 as the earth rotated. She took four 10-minute exposures of the galaxy, while we chatted in the crisp fall night.

In the lodge's library, a red-lit room with four computers, Mr. Rice, retrieved the photos and showed Joanna how to remove imperfections and superimpose one image on top the other. The result was a photo with a 40-minute exposure, with far greater detail than we could have seen by looking through the telescope.

The most stunning change came when the color was added. The bowtie shape disappeared and was replaced by a red-and-blue bubble that looked like it was about to burst. The red wisps were ionized hydrogen; the blue was ionized oxygen

We were staring at the remains of a supernova – a star that had exploded with immense power, producing gasses and radiation. It was stunning. We could see not just the beauty of the sky but the dangers. "You wouldn't want to be within 100 light years" of a supernova, Mr. Rice told us. "It could send so much radiation, it could lead to extinction."

Joanna and I returned to our room and took turns playing with M27 image and turning it into a screen saver. "Mike kept calling the Milky Way the arm of our galaxy," Joanna said. "There are so many more." Neither of us may take up astronomy as a hobby, but we've seen deeper into the sky than we ever expected to.

Write to Bob Davis at bob.davis@wsj.com

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How To Buy Life Insurance

The number of households with no life insurance is at a 50-year high. If you're thinking of buying coverage, here's what you need to know.

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Look to Arrow, Prudential to Be Performers in 2011

Since the calendar is about to turn, my December column wouldn’t be complete unless I reviewed 2010 and injected a few predictions for 2011.

2010 has been a very good year for value stocks. The stocks in the Standard & Poor’s 500 Value Index are up 10.7% thus far in 2010 (through 12/13/10), and the Standard & Poor’s 500 Growth Index is up 12.6% during the same period. Dividends, which are not included in the gains, were 37% higher for the stocks in the Value Index. And the Value Index had less volatility. Chances are, if you use a proven system, you probably made money in 2010.

2011 might prove to be a bit more difficult. There are a lot of crosswinds to contend with which could send the stock market in either direction at a moment’s notice. One of the biggest bullish factors is: Stocks are going up. Despite the worries about sovereign debt, the Koreas, interest rates, the housing market, politics, etc., all the indexes have broken out to new two-year highs. The most bullish thing a market can do is go up.

In addition, consumer sentiment is improving, recent economic data is better, holiday shopping has improved, and the Fed is bound and determined to keep the economy moving forward. In addition, new tax cuts could put more cash in your pocket in 2011. Forecasters are calling for continued improvements in corporate earnings, and investors are talking about selling bonds and buying stocks.

The positive factors seem to outweigh the negative aspects, but we’ll have to wait and see what unfolds.

My advice for 2011?

Stay the course and continue to use your system diligently. If you don’t have an investment system, you should seek out a proven system, but preferably not the advice promoted on TV. A final word of advice: Stay diversified because business sectors such as retail, health care, financial and even technology could perform very well or not so well.

My favorite stocks to begin the new year? It is difficult to pick just a few stocks that might perform very well during the next 12 months. As I stated above, I prefer to be well diversified and invest in many stocks. But if I have to choose, I believe Arrow Electronics (ARW) and Prudential Financial (PRU) will rack up big gains for you in 2011. Both stocks easily qualify as Benjamin Graham undervalued stocks with low price-to-earnings and low price-to-book-value ratios.

Arrow Electronics, founded in 1935 and based in Melville, N.Y., is the second largest distributor of electronic components and computer products. The company is the distributor for 900 suppliers throughout North America (48% of sales), Europe and Asia. ARW offers wide-ranging customer technical support and service. Recent restructuring efforts have reduced costs and increased profitability.

Revenues increased 21% and EPS soared 113% during the 12 months ended 9/30/10. Stronger growth in Asia, astute acquisitions, and lower costs contributed to the exceptional sales and earnings results. Total sales will increase by a minimum of 10% and EPS will increase 25% during the next 12-month period. Growth could exceed our estimates if the economy picks up and acquisition costs diminish. We expect Arrow to purchase Nu Horizons Electronics before the end of 2010, which will add to EPS in 2011 and provide faster growth in Asia.

ARW shares are undervalued at 1.02 times book value and 9.7 times latest 12-month earnings per share (EPS). Strong demand in Asia coupled with ongoing acquisitions will enable ARW to expand more rapidly during the next two years or more. The company has not paid a dividend since 1986, but we believe dividends could be reinstated within the next couple of years. ARW’s balance sheet is strong with plenty of cash to fund future expansion. ARW is medium risk. Arrow presents a rare opportunity to buy an underpriced value stock with rapidly growing earnings.

Prudential Financial, founded way back in 1875 with headquarters in Newark, N.J, is one of the largest financial services companies in the U.S. The company provides a wide range of insurance, investment management and other financial products and services. The Prudential name and “Rock” logo are among the most widely recognized in the U.S. and abroad. The company operates throughout most of the world, but is currently focusing on Japanese and Korean markets as well as retirement-oriented financial products in the U.S.

Revenues increased 11% and EPS soared 150% during the 12 months ended 9/30/10. Stronger growth in Japan and increased demand for annuities in the U.S. contributed to Prudential’s outstanding sales and earnings results. Total sales will likely increase by 5% and EPS will increase 8% during the next 12-month period. Prudential will purchase Star Life and Edison Life from American International Group (AIG) during the first quarter of 2011. The acquisition will add significant revenues in 2011 and provide rapid earnings growth in 2012 derived from the rapidly growing insurance markets in Japan.

PRU shares are clearly undervalued at 0.76 times book value and 9.1 times latest 12-month EPS. Strong demand in Japan coupled with the two acquisitions will enable PRU to expand rapidly during the next several years. The recently increased dividend, paid annually, provides a yield of 2.0%. PRU is medium risk. The company’s leading position, wide array of financial products and services, and global reach offer an investment opportunity too good to pass up.

A lifelong investment professional, J. Royden Ward applies his 40 years of investment research, portfolio management, writing and publishing experience to his role as analyst and editor of Cabot Benjamin Graham Value Letter (http://www.cabot.net/). The Cabot Benjamin Graham Value Letter is... More

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