Boston, MA 03/24/2014 (wallstreetpr) – Cullen/Frost Bankers, Inc. (NYSE:CFR) is a financial holding company which among other services, provides insurance. The company is excited by the manner in which its insurance business is growing. And with health care issues now dominating the lives of many Americans, the company believes that it is just getting started on a rewarding business.
We take a closer look at the company with a keen eye on its insurance business and why it might be the next big thing for the stock.
A segment to watch and admire
Cullen/Frost Bankers, Inc. (NYSE:CFR) announced that advanced insurance renewals provided a $2 million bonus that helped to boost its fourth quarter income. The advanced renewals related to the Affordable Care Act implementations, a windfall which came about as people rushed to put their insurance issues in order before the new federal laws come into force.
Insurance related income in the fourth quarter of 2013 climbed to $10.4 million, up from $8.4 million in the same quarter a year ago. Nonetheless, the figure seemed dwarfed by the net income of $620 million in the quarter. But that can only hold true until you look at how far Front’s insurance business come.
Improving position
When Cullen/Frost Bankers, Inc. (NYSE:CFR) pulled out of mortgage lending business around 1999, it entered insurance market. The company has made several acquisitions since then to boost its insurance business. And these have not disappointed.
The insurance division has been growing steadily over the years. As of 2012, Frost had its insurance business ranking at position 68 according to Business Insurance magazine. And by 2013, Frost Insurance Agency Inc was up seven places to position 61. That big leap suggests that with insurance poised to boom as new federal laws take effect, Frost is finding itself in the right place at the right time.
Insurance can be a winning formula
In the usually competitive and sometimes risky world of finance, insurance can be the source of good news when all else is not responding well. According to Phil Green, Frost CFO, insurance is a business where low pricing and claims handling can always deliver surprise wins. And these are areas which the company believes it can exploit and win.
