Ahead of the Bell: Insurers mixed

Shares of major insurers were mixed in Friday premarket trading after Genworth Financial Inc. and Allstate Corp.'s quarterly results missed Wall Street expectations, a government evaluation showed that MetLife Inc. doesn't need to raise more capital and an analyst said that stocks of some insurers have room to rise.

Richmond, Va.-based Genworth said late Thursday that it lost $469 million, or $1.08 per share in the three months ended in March, and said it would sell up to 49 percent of its Canadian mortgage insurance division to raise money. Excluding one-time charges, income was 3 cents per share on revenue of $1.7 billion.

Analysts polled by Thomson Reuters expected profit of 19 cents a share on revenue of $2.7 billion. Its shares slid slid 11 percent, or 49 cents, to $4.10.

Meanwhile, Northbrook, Ill.-based Allstate tumbled after its results also missed Wall Street estimates as investment income slipped and the number of policies in force fell. Its shares dropped 7 percent, or $1.95, to $25.65.

But there was also some good news in the sector as the government's stress test of 19 financial institutions found that New York-based insurer MetLife won't need to raise fresh capital. Also, life insurance stocks are up 225 percent since their March 5 lows, Deutsche Bank analyst Darin Arita said in a note to investors and could continue to gain if investors think the economy and financial markets will improve.

While he has a "Hold" rating on most of the insurers he covers, he noted that some stocks, including Conseco Inc., Genworth, Hartford Financial Services Group Inc., Lincoln National Corp., Protective Life Corp. and Phoenix Cos. could _ in some cases _ more than double if momentum in the equity markets remains positive.

"These stocks also have higher than average downside potential to the extent the stocks return to the March lows, but the dispersion is not as wide as the upside potential," he wrote.

Shares of MetLife rose 85 cents, or 2.7 percent, to $32.60; Hartford Financial shares gained 55 cents, or 3.5 percent, to $16.35; Lincoln National gained 40 cents, or 2.5 percent, to $16.30; and Phoenix Cos. stock rose 24 cents, or 12.7 percent, to $2.13.