UBS’ Top Quant Stocks In AI, IT, Healthcare & Other Sectors: Top 33 Stocks In All Sectors

20. MetLife, Inc. (NYSE:MET)

Number of Hedge Fund Investors In Q2 2024: 37

Sector: Financials

MetLife, Inc. (NYSE:MET) is one of the biggest insurance companies in the world. Along with insurance, the firm also offers pension benefits, retirement benefits, and other products. Premiums account for the biggest chunk of MetLife, Inc. (NYSE:MET)’s revenue. As of H1 2024, 64% of the firm’s revenue came from premiums, which makes it vulnerable to any constraints in its ability to raise premiums. Yet, unlike several other insurance companies, MetLife, Inc. (NYSE:MET) also generates a sizable portion of revenue from investment income. During H1 2024, 31% of the firm’s revenue came from investment income. Consequently, premiums and investment income form a key part of MetLife, Inc. (NYSE:MET)’s hypothesis. Investment income benefits from high interest rates, and the firm’s biggest profit earner is its Group Benefits business which provides vision, accident, and health insurance products to business employees. This dependence led to a 5.7% share price drop in October after MetLife, Inc. (NYSE:MET)’s Q3 results which saw Group Benefits earnings drop by 11% annually.

During the Q3 2024 earnings call, MetLife, Inc. (NYSE:MET)’s management commented on its Group Benefits business. Here is what they shared:

“Shifting to business segment results. Our Group Benefits business reported adjusted earnings of $431 million excluding notable items, down from a strong underwriting quarter a year ago. On a year-to-date basis also excluding notable items adjusted earnings are up 7%. Our scale and broad product range have long been points of competitive differentiation for our Group Benefits business, contributing to our adjusted premiums, fees and other revenue growth. In the quarter, adjusted PFOs, excluding the [Technical Difficulty] policies, rose 5.3%. For the year-to-date period, adjusted PFOs on the same basis similarly grew 5.5%. With employee benefits enrollment season again upon us, this year, more than 1 million U.S. employees will be able to make their enrollment experiences easier by using MetLife’s Upwise, a newly developed tool to help them choose and use their benefits.

Upwise simplifies benefits selection by making custom recommendations based on an employee’s individual needs and preferences. And Upwise is important because our research shows that more informed benefit selection decisions lead to a more engaged and productive workforce, a win for employees and employers.”