What You Need to Know
- Rates still look low.
- COVID-19 looks... undead.
- Some companies appear to have big deals in the pipeline.
Publicly traded life, health and annuity issuers are starting to roll out second quarter earnings in a month of haze.
Vaccines seem to have tamed COVID-19, but the delta variant could let the pandemic out of the cage.
Rising inflation seems to have given the Federal Reserve Board room to push interest rates higher, but, right now, average rates on the investment-grade corporate bonds life insurers favor are just a little more than 1 percentage point higher than the comparable Treasury rates.
Ryan Krueger, a securities analyst at Keefe Bruyette & Woods, a Sifel company, says one major, clear-cut earnings driver could be mergers and acquisitions: He’s listing Lincoln National Corp., Principal Financial Group Inc. and Prudential Financial Inc. as the companies most likely to sell or reinsure large blocks of business.
The shifting winds may make this earnings season one in which every company has a different story to tell, rather than one in which just about all companies do well or just about all do poorly.
Only a few U.S. life and health insurers are publicly traded — meaning that a large number of investors own shares of the insurers’ stock.