Metlife Inc (MET), American International Group Inc (AIG): Rising Rates Make These Insurers Strong Buys

Going forward, the company’s CEO is committed to improving results in the property-casualty unit and for that matter, Bloomberg reports, deals have been struck to expand operations in Turkey and China. Besides, the CEO thinks the company must reduce its debt and bolster its credit ratings before returning more capital to shareholders. For that matter, the company reduced nearly $6 billion in debt since the start of the year. Going forward, once the sale of its aircraft leasing unit to the Chinese consortium is complete, American International Group Inc (NYSE:AIG) would get $3.7 billion in cash, which could mean higher share repurchases.

Conclusion

U.S. insurance giants are enjoying all the benefits of the prevailing macroeconomic environment and the rising rates. The ones considered in this article are trading in proximity to their 52-week highs and I believe that they still have the potential to grow, which means they might create new highs. Rising rates will cause Genworth Financial Inc (NYSE:GNW) to grow its interest income from the bonds portfolio that supports future customer payouts. Efficient expense control at Metlife Inc (NYSE:MET) will help support its bottom line in the coming quarters, and American International Group Inc (NYSE:AIG) can benefit from its renewed focus on property-casualty business in Turkey and China, while debt reduction will de-risk its business vulnerability. So, I am bullish on the aforementioned stocks.

The article Rising Rates Make These Insurers Strong Buys originally appeared on Fool.com.

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