SOURCE: The Bedford Report

The Bedford Report

October 19, 2010 08:46 ET

MetLife to Play Important Role in AIG Exit Strategy

The Bedford Report Provides Analyst Research on American International Group & MetLife

NEW YORK, NY--(Marketwire - October 19, 2010) -  After experiencing catastrophic losses in 2008, and being rescued by massive capital injections from the government, the insurance industry has been taking steps forward on the path to recovery. In 2009, the arrest of activity in credit markets caused bond prices to drop. Property & Casualty insurers have been hit especially hard by the poor bond market. They hold as much as two-thirds of their assets in bonds, and as such are highly sensitive to credit market conditions. It is expected that weak investment portfolios and reduced income from the variable annuities, in addition to weak underwriting, will make for downside pressure on these companies in the coming months. The Bedford Report examines the outlook for companies in the Property & Casualty Insurance Industry and provides research reports on American International Group, Inc. (NYSE: AIG) and MetLife, Inc. (NYSE: MET). Access to the full company reports can be found at:

Last month AIG announced its plan to exit the biggest of the Wall Street bailouts. The troubled insurer plans to exchange the Treasury Department's $49.1 billion worth of preferred shares into common stock. The US government will get 1.655 billion common shares in return, along with 75 million warrants to buy more stock with a strike price of $45 a piece. The deal will give the Treasury more than a 92 percent stake in AIG before it begins selling its shares. The government has made it clear that the deal can't be completed until AIG proves its strength by displaying its ability to raise money from private investors and regain a top rating from credit agencies. AIG's CEO, Robert Benmosche, called the deal "a pivotal milestone" and said the company was ready to raise funds after a long absence from the markets.

The Bedford Report releases regular market updates on the Property & Casualty Insurance Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us for free at and get exclusive access to our numerous analyst reports and industry newsletters.

According to AIG's Chairman Steve Miller, MetLife shares obtained in AIG's sale of Alico "are an important asset that will be part of the architecture" of AIG's deal to repay the US. Earlier this year, MetLife agreed to pay $6.8 billion in cash and $8.7 billion in securities including stock to buy Alico. Based on MetLife's share price at the time, the total deal was valued at $15.5 billion.

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