US insurance composite advanced 0.6% last week as Wall Street defied shutdown

Reuters
10/07
US insurance composite advanced 0.6% last week as Wall Street defied shutdown

By Carlos Pallordet

LONDON, Oct 6 (Reuters) - (The Insurer) - Coastal insurers and reinsurers were the two best-performing groups in the Stonybrook Capital and Weild & Co North American insurance composite, with eight of its 12 industry groups advancing amid a positive week for equity markets.

The S&P 500, the Dow Jones industrial average both increased by 1.1%, closing in record territory. The Nasdaq 100 also rose 1.1% in the week to Friday, setting its own record on Thursday.

The small cap Russell 2000 index was up 1.7%.

Stonybrook-Weild noted the stock market held up strongly even as the federal government shut down non-essential services, with analysts warning that each week of closure could shave 0.1% to 0.2% off U.S. GDP.

「Despite the troubling and limited news, all that seemed to matter to the stock market is that private-sector data points to a softening US labor market, which increases the likelihood that the Fed will cut rates,」 the investment banks said.

「While Chair Powell recognizes the growing risk of ‘stagflation,’ the Open Market Committee is clearly currently more concerned about weak employment than persistent inflation, and Treasury yields dropped this week at all durations on increased anticipation of two further rate cuts in 2025,」 they explained.

The investment banks also highlighted that the AI-driven investment surge is reshaping the economic landscape, with markets rewarding firms like Amazon, Google, Microsoft and Meta for ambitious development plans.

Stonybrook-Weild noted much of this investment, funded through equity-based compensation, supports asset prices without adding to debt or equity supply, in stark contrast to the relatively modest $31 billion raised through this year’s IPOs.

In the North American insurance composite, advancers led decliners by 65 to 46.

Coastal insurers led the gains in the composite with a rise of 3.7%.

This was followed by reinsurers, which saw an increase of 2.9% on average,

Conduit Holdings saw the largest rise in the group, with shares recovering by 7.4% in the week.

RenaissanceRe rose 3.6% while Everest Grouo and SiriusPoint saw their shares increase by 3.6% and 1.5%, respectively, in the week to Friday.

Greenlight Capital was the only faller in the group, down 2.6% for the week.

Standard commercial insurers saw their shares up 2.1% for the week.

Leader Travelers posted a 2.4% increase, while Cincinnati Financial and Selective were among the most significant rises, with shares up 4.1% and 4.6%, respectively.

Old Republic rose 3.3% while Hanover Insurance added 2.5%.

Among the worst performers in the group, The Hartford edged up 0.3% while CNA Financial and United Fire Group both shed 0.1% respectively.

The group of specialty commercial insurers closed the week unchanged.

Fairfax and Intact Financial, the two largest companies in the cohort, added 2.1% and 2.0%, respectively.

WR Berkley and Markel rose 1.3% and 1.4%, respectively, while American Financial Group increased by 2.4%.

Meanwhile, Kinsale and White Mountains saw the largest individual rises, with shares up 11.2% and 7.3% respectively.

In contrast, Ategrity Specialty fell 9.4% while Bowhead Specialty and Tiptree dropped 7.4% and 4.6%, respectively.

Arch Capital ended the week flat while Axis Capital was down 1.5%.

Meanwhile, the group of global brokers rose 1.6%.

Aon and Arthur J Gallgher led the gains, with shares up 2.2% and 2.1%, respectively.

WTW added 1.5% while shares in Marsh McLennan edged up 0.8%.

The two worst-performing groups in the composite were insurance service providers, down 2.7%, and micro cap insurers, down 1.4%.

The Stonybrook-Weild North American Insurance composite is up 6.7% on a year-to-date basis.

In this article, we have included a selection of industry comp tables published in full by Stonybrook and Weild & Co in their weekly update.

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