MetLife to buy American General’s International Business?

By | July 13, 2009
We have all heard about American General’s woes the past few months. Needless to say they have been trying to sell different divisions of their current operations. MetLife Life Insurance is one of the largest domestic insurer’s that could possibly buy some of these assets.
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MetLife Shopping

Insurers have been battered by the financial crisis. That makes it a good time for MetLife to go shopping. The American International Group’s sale of its international life insurance business, Alico, seems to be an ideal target.

MetLife had $38 billion of cash and short-term investments in the first quarter. And cash continues to pour in as risk-averse customers flock to insurers with the strongest balance sheets — its annuity sales in the first quarter were $7.4 billion, more than double the amount in the same period last year.

MetLife is spoiled for choice. Insurers traded at about 1.5 times book value, or assets minus liabilities, before the crisis. Now, they trade at book. While nobody should expect a return to the headier days of the past, valuing these businesses at replacement cost seems too conservative over the long run.

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