Life and Annuity Stocks Outperforming the S&P 500: Morgan Stanley Analysts

The threat of the COVID-19 pandemic to the group life and group disability business may have started to ease, the company has little exposure to the stock market, and the pandemic has cut long-term care insurance claim costs.

Unum’s stock price rose to $32.59 last week, up about 33% from where the price stood at the start of the year, according to Dally’s team.

Reinsurer RGA, which protects life and annuity issuers against big losses, saw its stock inch up 0.4%, to $109.98.

COVID-19 mortality has been less painful for RGA than some have feared, and it also has little exposure to the stock market.

Themes

Dally wrote that this year, lack of exposure to the stock market and improvements in earnings projections are in. A high level of exposure to the stock market and any concerns about capitalization levels are out.

Stock performance statistics suggest that “markets are highly sensitive at this point to any company where capital sufficiency could be at risk,” Dally said.

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