Zacks Industry Outlook Highlights: American International Group, Universal American, Unitrin, AFLAC, Employers Holdings - Press Releases

For Immediate Release

Chicago, IL – August 04, 2010 – Today, Zacks Equity Research discusses the Insurance industry, including American International Group (AIG), Universal American Corp. (UAM), Unitrin Inc. (UTR), AFLAC Inc. (AFL) and Employers Holdings Inc. (EIG ).

A synopsis of today’s Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/38085/Insurance+Industry+Stock+Update+-+Aug.+2010.

After enduring stress with respect to pricing pressure and reduced insured exposure through mid-2009, the overall health of the U.S. insurance industry has improved to a great extent in 2010. Though the market turmoil forced many companies to take immense write-downs, the worst of the crisis appears to be now behind us.

The soft market conditions, along with legislative changes, remain the chief causes for concern for the overall industry at this point. The industry continues to be challenged by the regulatory uncertainties and massive health care restructuring.

Though there are signs of economic recovery, its sluggish pace is expected to continue at least through the remainder of 2010. Also, structural economies of scale have pushed the industry toward consolidation.

While enormous financial support from the government helped rescue American International Group (AIG)from collapse, many other firms remain under tremendous pressure or have fallen by the wayside. Competition within the segments of the industry has reduced, which is consolidating through mergers and acquisitions. This has increased market shares of the largest firms.

We expect static growth with persistent soft market conditions, resulting in further consolidation in the industry. However, we expect the overall condition to improve in 2011, should the economy turn to growth post-recovery.

We remain positive on AIG with a Zacks #1 Rank (Strong Buy) as the company continues to stabilize its core insurance operations and progresses on its restructuring plan. With an appreciation in the equity market and a gradual recovery in the economy in the upcoming quarters, we expect AIG to recoup the value of its investments.

The earnings in the first quarter of 2010 continue to reflect such benefits and we expect the trend to continue in the foreseeable future. AIG’s first quarter earnings were substantially ahead of the Zacks Consensus Estimate, primarily driven by the company’s robust results in its insurance operations and significant improvement in its investment income.

Other insurers that we like with a Zacks #2 Rank (Buy) include Universal American Corp. (UAM), Unitrin Inc. (UTR), AFLAC Inc. (AFL) and Employers Holdings Inc. (EIG ).

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AFLAC INC (AFL): Free Stock Analysis Report
 
AMER INTL GRP (AIG): Free Stock Analysis Report
 
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UNIVL AMERICAN (UAM): Free Stock Analysis Report
 
UNITRIN INC (UTR): Free Stock Analysis Report
 
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