By Carlos Pallordet

LONDON, Oct 20 - (The Insurer) - The North American insurance composite, compiled by Stonybrook Capital and Weild & Co, declined 2.8% last week as markets reacted sharply to short-term developments.

The S&P 500 index ended the week up 1.7% amid heightened volatility.

The tech-heavy Nasdaq 100 rose 2.5% while the blue-chip Dow Jones Industrial Average advanced 1.6%.

Meanwhile, the small cap Russell 2000 index gained 2.4%.

「The broad market was directionless, but still uncomfortably volatile this week,」 Stonybrook-Weild said.

「Hectic trading tracked with inconclusive headlines on tariffs, on the government shutdown, the outlook for stability in the Mideast and for peace in Ukraine,」 they explained.

The investment banks noted that U.S. Treasury yields fell amid credit concerns at several small U.S. banks, though most analysts viewed the risks as contained.

Stonybrook-Weild also attributed last week’s market volatility to elevated stock valuations following an almost three-year bull run. The ‘Buffett Indicator’ — market capitalization relative to GDP — currently stands near 221%, well above its long-term average of roughly 155%. However, the companies noted that excluding the ‘Magnificent Seven,’ the broader economy appears priced moderately above average at about 165%, but not at levels considered alarming.

In the North American insurance composite, advancers trailed the decliners by 32 to 81, with two of the 12 groups advancing in the week.

Referring to the underperformance of the composite relative to the overall market, Stonybrook-Weild noted this had been a trend since the early summer as prices in personal auto and commercial property insurance retreated from recent highs, 「although the light and now nearly-over Atlantic hurricane season has given a seasonal boost to some reinsurers and home insurers over the last six weeks.」

The two best-performing groups in the composite were micro cap insurers, up 1.5% and title insurers, up 0.8%.

The two worst-performing were global brokers, down 6.1%, and personal line insurers, down 5.2%.

Among global brokers, Marsh McLennan had the largest fall with its shares dropping 8.4%, followed by Arthur J Gallagher, down 7.0%. Marsh McLennan's share price dropped despite the broking company on Thursday reporting earnings per share of $1.85 for the third quarter that beat the analyst consensus, while underlying growth of 4% was the same as in the first and second quarters of this year.

Shares in Aon lost 3.8% while WTW declined 2.0%.

Among personal lines insurers, leader Progressive had a fall of 6.0% in the week to Friday, as investors reacted to a $950 million Florida policyholder credit that inflated expenses and pushed its combined ratio for September above 100%.

Meanwhile, Allstate, the second-largest company in the cohort by market capitalization, declined 4.8%.

Insurtech Root experienced the largest fall in the group, with its shares down 7.2%.

At the other end of the spectrum, shares in NI Holdings rose 2.9% while Kemper closed the week up 2.6%.

The group of standard commercial insurers was also among the most significant fallers in the composite, with an average fall of 3.2% for the week.

Leader Travelers lost 3.0%, while The Hartford, the second largest-company in the cohort by market capitalization, declined 3.5%. Travelers' share price dropped despite stronger-than-expected third-quarter profit, as investors focused on slowing premium growth and signs of softer commercial pricing.

Old Republic, Cincinnati Financial and The Hanover were down 3.9%, 3.7% and 3.5%, respectively.

Meanwhile, the group of reinsurers closed the week down 1.8%.

Leader Everest Group was the only constituent in the cohort to finish in positive territory, edging up a gain of 0.7%.

In contrast, RenaissanceRe lost 3.6% while SiriusPoint and Conduit Holdings fell 4.4% and 4.7%, respectively.

The Stonybrook–Weild North American insurance composite is up 2.6% 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.