Prudential signs pension agreement with GM
The deal comes at just the right time for the insurance company.
Under the agreement, Prudential will assume the responsibility to provide benefits to GM's employees who retired before Dec. 1, 2011. The new deal helps both parties as General Motors can reduce its pension obligations by $26 billion and Prudential gains from GM's planned group annuity contract worth approximately $29 billion.
The GM deal comes at just the right time for Prudential, which saw its group insurance division report a loss of $38 million in the first quarter of 2012. This result prompted the company to make several changes to the structure of the division, including a change in management as well a restructuring of the products and services offered.
With the exception of the last quarter, the group insurance division has been quite profitable for Prudential, and we expect the revenues generated by it to increase through the Trefis forecast period as the company continues to revise its policy along with effective marketing. Group Insurance accounts for 5% of our price estimate of the company's stock.
We will keep a close eye on Prudential as it continues to expand globally. The company is one of bidders for ING Asia's Life Insurance operations, along with competitors MetLife (MET) and Manulife (MFC). This deal would help Prudential establish a foothold in Southeast Asia and allow it to grow its operations in the rapidly growing insurance market in the region.
We have a price estimate of $55.24 on Prudential's stock, about 25% above the current market price.
More from Trefis
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The retailer labels the character's fake memoir as non-fiction. This comes weeks after it categorized the the Bible as fiction.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.