Higher-for-Longer Rates Are a Gift for Life Insurers. MetLife and Prudential Are Cashing In.
The life insurance business model will be a big winner if rates stay high or rise even further.
Overview
When interest rates were near historical lows, MetLife (NYSE: MET) and Prudential (NYSE: PRU) had a problem. They had made promises about future payments, but miserly interest rates made it more difficult to fulfill them profitably. Now that rates have increased a bit, meeting those policy promises is easier. And if rates rise, well, the story gets even better for MetLife and Prudential.
Which is why the outcome of the last Federal Reserve meeting was so positive for these life insurance companies. Here's what's going on and why a higher-for-longer rate environment sets MetLife and Prudential up for success.
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Details
Source
Originally published at www.fool.com.