Symetra Financial Corporation
) reported second-quarter 2014 adjusted operating income of 48
cents per share, which outperformed Zacks Consensus Estimate by
11.6% and increased 20% year over year.
The outperformance came on the back of solid underwriting results
in the Benefit Segment coupled with sales improvement across all
the business divisions.
Symetra Financial Corporation - Earnings
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Net income per share increased 82% year over year to $71.5
million or 62 cents per share in the reported quarter.
Investor's enthusiasm was reflected in the share price of
Symetra Financial that increased 1.74% to close at $22.81 in the
last trading session ending Jul 25, 2014.
Total revenue of Symetra Financial declined 0.5% year over year to
$521.8 million due to lower premiums. Results also missed the Zacks
Consensus Estimate by 0.8%.
Total benefits and expenses climbed 1.2% year over year to $463.9
million mainly due to an increase in the interest credited.
Pre-tax operating income increased 22.1%, driven by lower medical
stop loss ratio in the reported quarter. Loss ratio improved 530
basis points to 62.7%, reflecting low claims frequency. Both
improvements were on a year-over-year basis.
Medical stop-loss, limited benefits medical, and group life and
disability income insurance recorded year-over-year sales growth of
Pre-tax operating income remained flat year over year.
Total account values increased 17.2% from the year-ago quarter. FIA
account values rose to $2.5 billion from $855 million in the
Sales increased 47% year over year due to solid sales and improved
interest rate in traditional fixed annuities and FIA.
Pre-tax operating income declined 65% from the year-ago quarter due
to less favorable mortality experience and low interest margin.
Sales increased 95.6% year over year due to better selling
strategies and interest rate.
Pre-tax operating income fell 6.2% year over year in the said
quarter owing to increased operating expense, partly offset by
Classic Universal Life (UL) earnings.
Sales of individual life products increased to $9.1 million from
$3.0 million in the year-ago quarter, driven by higher Classic UL
Pre-tax operating loss rose to $6.2 million from $1.3 million in
the year-ago quarter due to low net investment income.
Total assets of Symetra Financial were $31.9 million in the second
quarter, increasing 6.0% from 2013-end level.
Stockholders equity was $3.4 million as of Jun 30, 2014, up 7.95%
year over year.
Book value per share of Symetra Financial at the reported
quarter-end was $21.04 rising 2.6% from Mar 2014 end.
Risk-based capital (RBC) ratio for Symetra Financial at the end of
second-quarter 2014 was 458%. Statutory capital and surplus,
including asset valuation reserve (AVR), was $2.3 billion.
Dividend and Share Repurchase Update
The board of directors of Symetra Financial declared a cash
dividend of 10 cents per share.
Symetra Financial repurchased 0.7 million shares in second-quarter
2014 with 6.9 million remaining under its authorization.
2014 Earnings Outlook
Symetra Financial reiterated 2014 adjusted operating income
guidance in the range of $1.80-$2.00 per share.
Performance of Other Insurers
Reinsurance Group of America Inc. (
) reported second-quarter 2014 operating income of $2.23 per share,
which surpassed the Zacks Consensus Estimate of $2.06.
ACE Limited (
) reported second-quarter operating income of $2.42 per share
outperforming Zacks Consensus Estimate by 8% and increased 5.7%
year over year.
Symetra Financial currently carries a Zacks Rank #3 (Hold).
However, a better-ranked insurance stock is Voya Financial, Inc. (
), having a Zacks Rank #2 (Buy).
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