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April 18, 2011 at 08:00 PM
One securities analysts is hoping for pleasant surprises when North American life insurers start announcing first quarter earnings, and another is hoping insurers will replace stock buybacks with dividend increases.
John Nadel and Dennis Zavolock of the New York office of Sterne, Agee & Leach Inc. say they “are feeling good about this overlooked group.”
The stock market looked good in the first quarter, fee-based earnings streams should be strong, and this quarter prices seem softer, because investor feelings about publicly traded life insurers are somewhat cooler, Nadel and Zavolock say.
The stocks of major group insurers could be more volatile, because the first quarter tends to be weak for group insurers and at least one group insurer has said first-quarter results may be weaker than expected, the analysts say.
At Sanford C. Bernstein & Co. L.L.C., New York, Suneet Kamath and other analysts say life insurer efforts to deploy extra capital by investing in shares of their own stock have not done much for ordinary investors.
