Poor equity markets could have an impact on life insurers’ financial results for the second quarter, an industry analyst warns.

Stocks in the Standard & Poor’s 500 fell 12% during the quarter, points out Andrew Kligerman, a life insurance analyst in the New York office of UBS Investment Research. In addition, life insurers’ earnings in the quarter were likely reduced by deferred acquisition cost unlocking, higher variable annuity guarantee liabilities and market-related pressures on risk-based capital ratios.

Kligerman reports that a UBS survey found 64% of investors expect the U.S. life sector to outperform the S&P500 in the quarter, while 13% expect the sector to be in line with other S&P500 companies, and 23% look for it to underperform that index.

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