MetLife: `Irrational Pricing' From Some Group Life Competitors
June 23 2009 - 12:22PM
Dow Jones News
The economic downturn has put some pressure on its
employee-benefits business, but MetLife Inc.'s (MET) top benefits
sales executive says the company has done better than most, despite
an alarming trend toward underpricing by some competitors.
"We see it in some business," particularly in the biggest group
life and employee-disability accounts, said Anthony J. Nugent,
executive vice president of employee benefits sales for MetLife,
during a conference sponsored by Wachovia Securities that was
Webcast Tuesday. "MetLife is involved in a lot of the bid
activity," he said. "We know irrational pricing when we see
it."
The activity is driven by a desire to build up market share in a
weak environment, and he estimated some price quotes are 10% to 15%
below the appropriate rate.
MetLife's group insurance business covers around 40 million
employees and more than 90 of the Fortune 100, Nugent said. It
sells life and non-medical health products, voluntary benefits
programs and retirement and savings programs. It does not sell
health insurance.
As for its own business, MetLife has done well enough to be in
the market to attract top talent from competitors or even make some
acquisitions. Nugent said the company is "in many conversations,"
about potential recruitment or merger and acquisition
opportunities.
Keeping a relatively strong financial strength rating has been a
help, he said. A strong rating, once considered "table stakes," is
now seen as important enough to influence buying decisions, Nugent
said.
Layoffs have hurt MetLife's employee-benefits business as
companies reduce headcounts, "but the good news is we still have
the federal government, and they are growing," Nugent said.
He also said the company sees health-insurance reform "coming
down the pike," and sees the potential for some favorable impact on
its voluntary benefits programs.
Shares of MetLife were up 1.9% recently to $29.41.
-By Lavonne Kuykendall, Dow Jones Newswires; 312-750-4141;
lavonne.kuykendall@dowjones.com