NU Online News Service, Nov. 4, 2003, 2:03 p.m. EST – The MONY Group Inc., New York, scraped up a profit for the third quarter, but MONY Chairman Michael Roth says the results show why the company should be acquired by AXA S.A., Paris.
AXA announced plans to acquire MONY for $1.5 billion in cash in September. Some shareholders, including some of the company’s biggest institutional shareholders, have complained that the price is too low.
But “competitive pressures and issues of scale continue to challenge our ability to generate appropriate levels of earnings,” Roth says in a statement.
The AXA deal is the best opportunity for shareholders, Roth says.
MONY is reporting $5 million in net income for the latest quarter on $562 million in revenue, up from a net loss of $30 million on $485 million in revenue for the third quarter of 2002.
Sales of corporate-owned life insurance fell to $30 million, from $78 million, because of the regulatory turmoil surrounding the product, and MONY let sales of fixed annuities fall to $26 million, from $48 million, to keep low interest rates from squeezing its fixed annuity profit margins.
But sales of variable annuities increased to $103 million, from $85 million, and sales of life insurance products other than COLI increased to $38 million, from $31 million, MONY says.
MONY notes that it is trying to give more attention to “high-performing financial professionals” in its career agency system and get them to make more of their sales of non-MONY products through MONY’s own securities and brokerage subsidiaries.