Protective Life CorporationPL

Morningstar Rating

Stock Research and Analysis

by Alan Rambaldini

Until 2008, Protective Life could point to its consistently profitable history as proof that its strategy of avoiding exotic insurance and annuity products worked. However, the financial crisis exposed the weak underbelly of the firm's investment portfolio, Read more

Bulls Say

Protective's strategy of buying unwanted blocks of individual life insurance policies from rival firms helps the firm acquire business at a good price.

More than half of Protective's insurance is term life, which produces more reliable underwriting results than exotic policies, such as variable universal life.

Protective has historically been a market leader in using capital market solutions to free up reserves, which can then be reinvested elsewhere for greater returns. Read more

Bears Say

As its current closed blocks run off, Protective may succumb to the pressure to replace those earnings with ill-conceived acquisitions.

Commercial mortgage loans make up a larger portion of Protective's investment portfolio than at its peers, increasing the firm's vulnerability to an ongoing downturn in this market segment.

Not only is Protective's assets/equity ratio dangerously elevated, but its debt/equity ratio may also be a cause for concern. Read more

Strategy

Protective has consciously avoided marketing difficult-to-underwrite products like variable life and annuities with guarantees, a decision that has worked to its benefit in the aftermath of 2008's financial Read more

Management

John D. Johns became CEO of Protective Life in 2001 after a stint as COO, and in 2003 he added chairman of the board to his resume; corporate-governance best practices would rather see these two positions separated. The 22 directors and officers of Read more

Profile

Protective Life produces, distributes, and administers insurance and investment products, such as life insurance, annuities, and auto service contracts, to individuals and Read more

First Name

Last Name

Email Address

Zip Code

Create Password

Verify Password

(6-15 characters; case sensitive)

What is your occupation or job title?

Select...

Your registration indicates agreement to the terms of use.

How Dodge & Cox Looks at Financials
Watch more