American International Group Inc. landed a spot among the biggest stock losers this week amid the sudden termination of a senior executive.
The multiline giant fired Mark Lyons, who had been serving as the company's interim CFO, executive vice president, global chief actuary and head of portfolio management. AIG said it let Lyons go because he had violated confidentiality-related obligations, though the violation was unrelated to the company's financial reporting.
Through early afternoon trading, AIG shares dropped 7.6% for the week ending Feb. 3.
Wells Fargo analyst Elyse Greenspan said in a note that she would expect some potential pressure on AIG's shares as a result of the firing while adding that she had long regarded Lyons "favorably."
"However, we acknowledge that [CEO] Peter Zaffino and the rest of the management team have done a great job recruiting talent to the company, as shown by the ability to fill Mr. Lyons' role internally," Greenspan said.
Sabra Purtill, who has been CIO of Corebridge Financial Inc., will take over as AIG's interim CFO. Turab Hussain will serve as interim global chief actuary.
Meanwhile, United Insurance Holdings Corp. found itself on the opposite side of the spectrum, taking a spot among the biggest winners of the week.
The Florida-based insurer this week announced it sold renewal rights on certain personal lines business in Florida, as well as certain data and intellectual property to Slide Insurance Co. About 72,000 UPC Insurance personal lines policies were to be canceled on Feb. 1 as a result of the deal, with Slide set to immediately issue replacement policies.
The transaction will allow UPC Insurance to "focus on its fast-growing commercial specialty property portfolio" while further reducing its exposure to Florida liabilities, the company said in a statement.
United Insurance Holdings' stock climbed 28.9%.
Earnings season keeps rolling
Results from the fourth quarter of 2022 continued to pour out across the industry during the week as well.
CreditSights analyst Josh Esterov said in an interview that the investment community probably had some "loftier expectations" for variable investment income and higher hopes for sales metrics than how results are playing out so far. For the life insurance sector, Esterov said he is seeing "more favorable, recurring profitability opportunity" due to the moderation in both COVID-related mortality claims, as well as general mortality.
MetLife Inc. posted results that reflected a year-over-year decline in revenue, due in part to lower net investment income. During an earnings call, executives said the company is open to M&A opportunities and that layoffs at large companies have not yet impacted the company's group business.
MetLife's shares lost about 3.6% for the week, as of early afternoon trading on Feb. 3.
In the property and casualty sector, Esterov said the near-term outlook for retail insurance, particularly for carriers focused on the auto space "remains extremely complicated and challenging" due to inflationary cost pressures and the limited ability for insurers to push price as much as they would like. On the commercial side, the analyst noted that underwriters are approaching "peak margin," implying that they have found a price point of rate adequacy.
In the wake of heavy losses and high combined ratios, The Allstate Corp. executives said this week that the company is implementing a plan to restore profitability to its auto insurance brand, particularly in California, New York and New Jersey, states that accounted for nearly half of the $2.8 billion full-year 2022 underwriting losses in the company's auto business.
Allstate's stock climbed about 1.8% for the week.
Through early afternoon trading on Feb. 3, the S&P 500 rose 1.70% to 4,139.78 for the week. The S&P 500 U.S. Insurance index was down 2.43% to 595.59.
