The CEO of Truist does the insurance business, but doesn’t lose sales accounts

More than three years after the merger that created Truist Financial legally shut down, the Charlotte, North Carolina-based company said it has raised the last of its investment funds and checked all the boxes in its long-term partnership. i- make lists.

But this year’s ongoing change in the execution process includes one question that remains unanswered: will Truist decide to sell a large part of its insurance subsidiary?

While CEO Bill Rogers spoke Thursday of the business — acknowledging its role in generating revenue, touting its ability to grow organically as well as commercially and noting that it’s 100 years old — he didn’t close the door. door on a possible sale.
“We love the insurance business,” Rogers said during the company’s fourth-quarter earnings call. At the same time, “it is a dynamic business (and) we want to make sure that we all have the capacity and the ability to create capital and support all our businesses and their growth.”

Speculation about the future of Truist Insurance Holdings began to swirl last month after The Insurer, a business publication, reported Truist hired Morgan Stanley to explore an acquisition of up to 30% of its insurance sales division. The purchase will help to provide the confirmation of the third part of the cost of the business, which the company said is low cost, according to the article.

Four days later, Rogers tell the researchers at a business meeting that the unit “is a growing business … it’s a business we want to make sure we can invest in.”

“Remember we’re the only organization that can do it at scale … and it’s just an opportunity we don’t want to compromise,” Rogers said at the time.

The size of Truist Insurance Holdings makes it one of the largest in the US banking industry. It is the country’s sixth largest insurance company and accounts for 9% of the company’s revenue, 14% of its revenue and 34% of its revenue, according to a presentation Truist gave to November.

Since 2019, the year that BB&T and SunTrust Banks once to create the juggernaut that is now known as Truist, the combined company has made 11 insurance sales. Last year, three deals were announced, including November 2022 purchase BankDirect Capital Finance, a national specialty finance company owned by Texas Capital Bancshares in Dallas.

The BankDirect transaction added $3.1 billion of low-cost, variable-rate loans to Truist’s loan book and helped grow commercial loans by 4.4% for the quarter, the company said Thursday.

In the fourth quarter, the revenue of Truist insurance increased by 15% compared to the same quarter in 2021. The increase, which was caused by organic growth and sales, helped to offsetting Truist’s fourth-quarter decline in total revenue, which fell 4.1% year over year. said the company.

Just like last month, Rogers on Thursday declined to comment on reports of a potential sale.

But some researchers think that what Rogers said is just as important as what he didn’t say.

The executives may “want to stay connected if (a sale) doesn’t happen, they’re still interested in the business and they’re interested in continuing to build it,” said Piper Sandler analyst Stephen Scouten in an interview.

“But I don’t even feel dead in the water, no sale will happen,” he added.

Analyst Mike Mayo of Wells Fargo Securities agreed, comparing the Truist franchise to a Corvette and saying the insurance business is like “a big ornament” on the hood.

“They’re saying they’re going to continue to improve, add and it seems like they’re emphasizing this high level,” Mayo said in an interview. “But they didn’t close the door (on a sale). They didn’t say no.”

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