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Market Volatility May Hurt Some Insurers More Than Others: Analysts

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Stock price swings are back — and so are securities analyst questions about which life insurers are most, and least, vulnerable to investment market volatility.

Nigel Dally and Bob Huang, analysts at Morgan Stanley look at market volatility questions in a new update on publicly traded life and annuity issuers in North America.

In recent years, smoothly rising stock prices have buoyed the profitability of issuers’ variable universal life insurance, variable annuity and indexed products.

(Related:  New Hybrid Indexed Annuities Balance Market Volatility)

Now, price volatility could cause problems for variable products at companies such as Ameriprise, Brighthouse Lincoln, Principal and Voya, according to the Morgan Stanley analysts.

The analysts compared what happened to those insurers’ own stock prices last week with the usual volatility levels for the insurers’ stock prices.

“Each stock performed worse than expected, given  the market decline,” the analysts write in the update.

One investor concern may be the effects of stock price volatility itself, the analysts write.

The analysts say another concern may be the possibility that market volatility will lead to lower interest rates, and that lower interest rates will add to some insurers’ pain.

— Read Managing Through a Volatile Marketon ThinkAdvisor.

— Connect with ThinkAdvisor Life/Health on LinkedIn and Twitter.


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