MetLife’s (MET) Structured Solution for Providing Financial Security

MetLife, Inc. MET recently introduced a structured installment sale solution, which can be used for the sale of properties that qualify for the installment method under Section 453 of the Internal Tax Code. The solution can be used in 49 states, Puerto Rico and Washington, DC through MET’s subsidiary, Metropolitan Tower Life Insurance Company.

If the parties decide to proceed with an installment sale for a property, they might prefer a structured installment sale because of the many advantages. The concept of a structured installment sale essentially involves distributing the entire proceeds of the sale in periodic payments instead of paying a one-time lump sum to the seller. As taxes will be paid as installments are received, sellers will be able to defer their tax liability and benefit from lower capital gains taxes. If taxes have to be paid in full in the year the asset is disposed of, this can put pressure on the seller’s financial situation.

By launching the latest structured solution, MetLife intends to ensure the financial security of sellers by providing them with a defined income stream and protecting income from market volatilities. The latest announcement reflects MET’s efforts to expand its presence in the structured installment sale market and strengthen its fixed income suite, through which the multiline insurer distributes structured products.

MetLife, with its strong expertise and strong financial position, has been providing financial relief through structured solutions for more than 35 years. A structured installment sale typically adds an insurer, which boasts strong financial strength ratings from major credit rating agencies, underscoring its strong ability to meet the buyer’s future obligations. The unit of MET, through which the structured installment sales solution can be used, is fit to serve the purpose of assuming obligations as it enjoys a strong credit rating of A+ from AM Best ( as mentioned in the company’s recent 10-K filing).

MetLife has frequently used product launches to build capacity and strengthen its global presence. In February 2022, MET launched an innovative 360Health solution in Bangladesh with the aim of empowering customers in the country to effectively tackle critical illnesses. Last year, the insurer introduced a pet insurance product to extend improved pet care and solve financial stress for pet owners. MetLife pursues buyouts and partnerships to unveil cutting-edge products and services around the world.

MetLife shares have gained 7.4% in one year compared to the industrydown 15.8%. MET currently carries a Zacks Rank #3 (Hold).

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Actions to consider

Some higher-ranked insurance stocks include Horace Mann Society of Educators HMN, International Society of the Old Republic ORI and CNO Financial Group, Inc. NOC. While Horace Mann sports a Zacks rank #1 (strong buy), Old Republic and CNO Financial currently carry a Zacks rank #2 (buy). You can see the full list of today’s Zacks #1 Rank stocks here.

Horace Mann’s earnings have exceeded estimates in each of the past four quarters, with the average surprise being 22.80%. Zacks’ consensus estimate for HMN’s earnings in 2022 suggests a 1.1% improvement on the figure released a year ago, while the same for revenue suggests 1% growth. Horace Mann’s earnings consensus mark for 2022 has moved north 8.4% in the past 60 days.

Old Republic’s net income has exceeded earnings estimates in three of the past four quarters and missed once, with the average surprise being 38.74%. The Zacks consensus estimate for ORI’s revenue in 2022 has moved north 3.7% over the past 60 days. The Old Republic has a VGM score from B

CNO Financial’s earnings have exceeded estimates in each of the past four quarters, with the average surprise being 25.48%. The Zacks consensus estimate for CNO revenue in 2022 has moved north 2.6% in the past 30 days. CNO Financial has a VGM score of B.

Old Republic stock has gained 17.9% in one year. Meanwhile, shares of Horace Mann and CNO Financial have lost 5.2% and 10.3% respectively over the same period.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Sarah J. Greer