Hartford Financial Services (HIG) closed up 5.63% today. A move that was in line with other large life insurance providers, including Met Life (5.16%), Prudential (5.35%), and Lincoln National (6.44%). These moves outpaced the domestic Financial Select Sector SPDR (XLF) return of 4.75%. As recently as last week, analysts feared that the poor yield environment would constrain the profitability of the whole life insurance industry because companies would not be able to sufficiently surpass the rates embedded in their products. The recent strength of equities and increases in the 10-year yield have assuaged some of that fear. It is possible that today’s move was the start of a sector rotation. It’s also possible that some shorts were squeezed because today’s performance was inversely proportional to their relative standing in the industry.
-Zach
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