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COVID-19 Omicron Variant Hits Life Insurers' Stock Prices

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What You Need to Know

  • CVS, Humana, Anthem and Centene all beat the Dow Jones Industrial Average.
  • Typical life insurer stocks dropped 3.5% to 5%.
  • A life reinsurer did especially poorly.

The COVID-19 pandemic wrecked life and health executives’ hopes for a calm Thanksgiving weekend by producing an aggressive new variant.

A World Health Organization advisory group dubbed variant B.1.1.529 the “omicron” variant. WHO put that variant in its top “variant of concern” category, along with the alpha variant, the beta variant, the gamma variant and the deadly delta variant,

The omicron variant appears to spread more quickly than other variants identified so far, and it seems to be reinfecting people who have already had COVID-19, WHO officials said.

Financial markets traders responded by making big, quick transactions based on the assumption that the variant will lead to new travel restrictions and new social distancing efforts.

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The Dow Jones Industrial Average stock index fell 905 points, for example, to 34,899.34.

Life and Health Stocks

In recent months, health insurers have performed well, as pandemic-related decreases in spending on routine health care have offset much of the impact of increased spending on COVID-19 care.

Life insurers have mostly recorded profits, in spite of low interest rates and pandemic-related increases in death benefits payouts. But life insurers have expressed more concern about the pandemic in recent weeks, as the pandemic has caused more deaths among people under the age of 65, who tend to have more life insurance than older people.

Stock traders today appeared to assume that the omicron variant will hit life insurers harder than health insurers.

  • The stock prices of Anthem, Centene, Humana and UnitedHealth all dropped from 1.7% to 2.28% — less than the Dow Jones Industrial Average.
  • The stock prices of Ameriprise, Brighthouse Financial, CNO Financial, Equitable, Globe Life, Lincoln Financial, MetLife, Primerica Principal Financial Group, Prudential Financial and Unum Group all fell 3.5% to 5%.
  • The stock price of Reinsurance Group of America — a company that insures life insurers against spikes in mortality and longevity risk — fell 9.58%.

(Image: Shutterstock)