Zacks Industry Outlook Highlights: Aviva, Genworth Financial, ING Groep, WellPoint and UnitedHealth Group

   Zacks Industry Outlook Highlights: Aviva, Genworth Financial, ING Groep,
                       WellPoint and UnitedHealth Group

PR Newswire

CHICAGO, Jan. 23, 2013

CHICAGO, Jan. 23, 2013 /PRNewswire/ --Today, Zacks Equity Research discusses
the U.S. Insurance, including Aviva plc (NYSE:AV), Genworth Financial Inc.
(NYSE:GNW), ING Groep NV (NYSE:ING), WellPoint Inc.  (NYSE:WLP)
andUnitedHealth Group, Inc.  (NYSE:UNH).


A synopsis of today's Industry Outlook is presented below. The full article
can be read at 


The economic uncertainty is making it difficult for life insurers to expand
their customer base. In fact, insurers are struggling to even retain their
existing clientele. Narrowed disposable income owing to high unemployment and
huge credit card debt has made it difficult for Americans to invest in
retirement products such as life insurance.

Moreover, the low interest rate environment is one of the major risks for life
insurers at this point. Investment income remains weak as life insurers are
experiencing low returns on fixed-income instruments. Also, low rates are
spoiling life insurers' efforts to grow fixed annuities and universal life
insurance sales.

In December, Fitch Ratings has affirmed the credit outlook for the U.S. life
insurance industry at stable for 2013. This action was primarily based on the
expectation of insurers' improved liquidity and balance sheet strength.
Further, the rating agency expects the nagging low interest rate environment
to restrict earnings growth of the sector.

On the other hand, interest in cheaper products to cover only basic risks has
increased. As a result some life insurers have already gone back to the basics
in order to escape financial and regulatory difficulties.

Currently, the life insurers with favorable Zacks Ranks worth considering are
Aviva plc (NYSE:AV) with a Zacks Rank #1 (Strong Buy); Genworth Financial Inc.
(NYSE:GNW) andING Groep NV (NYSE:ING) with Zacks Rank #2 (Buy).

Health Insurers

The U.S. health care system is significantly dependent on private health
insurance, which is the primary source of coverage for most Americans. More
than half of the U.S. citizens are covered under private health insurers such
asWellPoint Inc.  (NYSE:WLP) andUnitedHealth Group, Inc.  (NYSE:UNH).

Unfortunately, these insurance companies utilize a pre-existing condition
exemption clause to control costs and maximize profits. In 2010, the historic
healthcare reform legislation -- The Patient Protection and Affordable Care
Act (PPACA) -- was passed by the Congress with the intension of making health
care facilities more affordable, preventing private insurance companies from
continuing with the pre-existing condition clause and at the same time
bringing in 32 million more people under coverage by 2019.

However, the legislation has had many detractors who contested several of its
stated benefits and considered it another entitlement program that the country
can ill afford. Finally, in June 2012, the U.S. Supreme Court ruled in favor
of the reform, rejuvenating the industry by removing major uncertainties.
Obama's re-election further ensures a certain future to the law.

With respect to the individual mandate, which drew the most attention as it
requires all uninsured Americans to purchase a minimum level of health
insurance coverage, the Supreme Court ruled that individuals failing to buy
health insurance will have to pay a tax fine, but forcing them to buy
insurance will be illegal. Employers will also be fined if they fail to
provide insurance coverage to their workers.

While the legislative overhaul brings more regulatory scrutiny for private
insurance companies, the net negative effect is far softer than was initially
feared. Also, the removal of this uncertainty is a net positive in its own

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