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MetLife, Prudential see reduced financial impact from COVID-19

08/05/2021 | 01:54pm EDT
FILE PHOTO: Statue stands atop Grand Central Station in front of the MetLife building in New York

(Reuters) -MetLife Inc said on Thursday the COVID-19 pandemic had a reduced effect on its second-quarter results, echoing remarks by Prudential Financial Inc and lifting the outlook for the U.S. insurance sector.

The comments and cautiously optimistic forecasts from two large U.S.-based insurers come as public health officials worldwide warn about COVID-19's aggressive Delta variant and concerns grow about areas with low vaccination rates.

MetLife and Prudential can be seen as proxies for the labor market and are sensitive to interest rates and stock market movements, said Cathy Seifert, an equity analyst at CFRA.

"The macroeconomic impact from COVID has lessened," she said. MetLife's large employee benefits business offers a way "to leverage an improvement in employment levels."

The pandemic is still costing insurers. MetLife said its U.S. group business took a $75 million hit from claims related to the health crisis.

"Our results show that COVID-19 is both still with us but lessening in its impact," MetLife Chief Executive Officer Michel Khalaf said on a conference call on Thursday.

Prudential executives said on Wednesday that while the pandemic had affected results, the impact was "beginning to moderate" and that people with insurance are more likely to be vaccinated.

"We believe that the vaccination rate of the insured population is higher than the general population," Chief Financial Officer Kenneth Tanji said on a conference call.

MetLife on Wednesday reported adjusted second-quarter profits that blew past Wall Street estimates, as strong investment gains, especially private equity, helped offset the costs of coronavirus-related claims.

Prudential posted strong results on Tuesday.

In MetLife's U.S. group insurance unit, the lower impact of COVID-19 helped produce a 39% sales rise in the first half, and Khalaf predicted record sales for the year "if current trends hold."

MetLife shares were up about 2.2% at $58.40 in afternoon trading on Thursday. Prudential shares were up 1.9% at $101.81.

(Reporting by Alwyn Scott in New York and Sohini Podder in Bangalore; Editing by Jonathan Oatis and Paul Simao)

By Alwyn Scott

© Reuters 2021
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