UnitedHealth Group Inc. is preparing to kick off the new life, health and annuity issuer earnings release season tomorrow, before the stock market opens for business.
The first life and annuity companies to release earnings will likely be Principal Financial Group Inc. and Reinsurance Group of America Inc. Those companies could post their earnings Jan. 28.
The big question for UnitedHealth is will it continue to emphasize its role as a manager of health care delivery services and an administrator of Medicare and Medicaid plans, rather than as a commercial health insurance gorilla.
For Principal and RGA, the top questions will be interest rates, interest rates and interest rates.
Here are three more questions securities analysts may be thinking about, based on analyst commentaries from Morgan Stanley Research and Keefe, Bruyette & Woods.
1. What’s up with currency exchange rates?
Many of the big U.S. life insurers have tried to diversify, and benefit from rapid economic growth overseas, by expanding in markets such as China, India and Indonesia.
Morgan Stanley analysts have noted, in a commentary on MetLife Inc., that international operations may be good for earnings in the long run but, in the short term, may increase a life insurer’s exposure to geopolitical risk and currency value fluctuations.
2. How are expenses?
The Keefe, Bruyette & Woods analysts pointed out that some life insurers tend to high expenses in the fourth quarter, and that the expense numbers can be high enough for some life insurers to throw off securities analysts’ earnings forecasts.