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Insurance News: Buffett, American International Group, Inc. (AIG) & MGIC Investment Corp. (MTG)

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Editor’s Note: Related tickers: American International Group, Inc. (NYSE:AIG), MGIC Investment Corp. (NYSE:MTG), American Financial Group (NYSE:AFG), Prudential Public Limited Company (ADR) (NYSE:PUK), Radian Group Inc (NYSE:RDN), Berkshire Hathaway Inc. (NYSE:BRK.A), The Kroger Co. (NYSE:KR), Bank of America Corp (NYSE:BAC)

Buffett Bets on Business Insurance ‘Big Time’ (BusinessWeek)
Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc. (NYSE:BRK.A), is planning an expansion in commercial insurance after hiring four executives from American International Group, Inc. (NYSE:AIG) “We would like to get into the commercial-insurance business very big time,” Buffett, 82, said yesterday in an interview with Bloomberg Television’s Betty Liu, before the company’s annual meeting this weekend in Omaha, Nebraska. “We hired them because they’re very good at the commercial insurance business.” …Berkshire Hathaway Inc. (NYSE:BRK.A) has units that provide auto coverage and reinsurance and hasn’t played a big role in providing business policies, Buffett said. Buffett, who’s also Berkshire Hathaway Inc. (NYSE:BRK.A)’s CEO, said he didn’t poach the executives from New York-based American International Group, Inc. (NYSE:AIG).

American International Group Inc (NYSE:AIG)

American International Group Given New $53.00 Price Target at BMO Capital Markets (AIG) (UtahPeoplesPost)
Analysts at BMO Capital Markets lifted their price target on shares of American International Group, Inc. (NYSE:AIG) from $1.34 to $53.00 in a research report issued to clients and investors on Friday, reports. Ten analysts have rated the stock with a hold rating and nine have assigned a buy rating to the company. American International Group, Inc. (NYSE:AIG) has a consensus rating of “Hold” and a consensus target price of $42.44. Shares of American International Group, Inc. (NYSE:AIG) traded up 5.49% during mid-day trading on Friday, hitting $44.445. American International Group has a 52 week low of $27.18 and a 52 week high of $42.66. The stock’s 50-day moving average is currently $39.37. The company has a market cap of $65.615 billion and a P/E ratio of 20.67.

MGIC Reports Wider Loss YoY (Nasdaq)
MGIC Investment Corp. (NYSE:MTG) reported first quarter 2013 operating loss of 31 cents per share, substantially worse than the Zacks Consensus Estimate of a loss of 20 cents per share. MGIC Investment Corp. (NYSE:MTG) had reported an operating loss of 10 cents per share in the year-ago quarter. Total revenue for the quarter came in at $269.2 million, down 29.1% year over year. Results were also below the Zacks Consensus Estimate of $285 million. Net premiums written were $248.5 million, down 2.5% year over year. The company’s new insurance written soared 54.8% year over year to $6.5 billion in the quarter. MGIC Investment Corp. (NYSE:MTG)’s primary insurance in force stood at $159.5 billion, down 1.6% from $162.1 billion at year end 2012.

Compass Point Downgrades MGIC Investment to Neutral on Fairly Balanced Risk/Reward (Benzinga)
In a report published Wednesday, Compass Point analyst Jason Stewart downgraded the rating on MGIC Investment Corp. (NYSE:MTG) from Buy to Neutral, but raised the price target from $3.00 to $5.00. In the report, Stewart noted, “We have been staunch supporters of the role of private mortgage insurance (MI) in the US housing finance markets and that view has not changed. However, assigning a value greater than $5 to MGIC Investment Corp. (NYSE:MTG) shares today is akin to making a wager on the government’s propensity and ability to transform the US housing finance market from one that is funded publicly to one largely funded by private capital.

Five major Cincinnati firms agree to give millions to Cintrifuse (BizJournals)
The Cintrifuse Early Stage Capital Fund I has five new major investors in American Financial Group (NYSE:AFG), The Kroger Co. (NYSE:KR), Castellini Management Co., the Greater Cincinnati Foundation and Messer Financial Services Inc. The venture capital fund of funds has now closed on $51 million, up from $40 million in December, according to a news release. The Greater Cincinnati Foundation invested $1 million, spokeswoman Beth Benson said. A The Kroger Co. (NYSE:KR) spokesman said the company won’t release how much it invested. Spokespeople from Messer and American Financial Group (NYSE:AFG) also chose not to reveal the companies’ contributions. A spokesperson from Castellini Management Co. was not immediately available.

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