Deutsche Bank On MetLife Post Investor Day

Deutsche Bank has published a research report on MetLife, Inc.

after attending the company's investor day. In the report, Deutsche Bank writes "MetLife estimates it has $4.7 bn of excess capital in its US operations, based on a 410-440% RBC ratio relative to a 350% target. Most double-A rated life insurers, however, are keeping RBC ratios above 400%, even though Moody's requires a 325% ratio for most insurers. If MetLife keeps a minimum 400% RBC ratio and a cushion, it has no excess in its US subsidiaries until the rating agencies reduce capital requirements. If we assume 1.5 years of interest/dividend coverage, the hold co would have $300 mm of excess capital rather than $2 bn. The $1.8 bn of non-US excess capital (including $1.4 bn from ALICO) was a positive surprise, and MetLife plans to dividend most of that to the hold co in 2011." Deutsche Bank maintains its Hold rating and $47 price target. MetLife closed yesterday at $40.75.