2014 equity performance of U.S. insurance industry sectors, global reinsurance mixed
April 29, 2015 by IFAwebnews Staff
The stock performance of U.S. property/casualty, life/annuity, health and global reinsurance companies was mixed during 2014 for the four major insurance industry sectors, according to a recent Special Report from A.M. Best.
The report covers fourth quarter and full-year results.
U.S. property/casualty stocks performed well in 2014, but further upside appears limited
Of the property/casualty companies A.M. Best tracks for this analysis, 22% saw their share prices fall in 2014, while 78% rose year-over-year. Small and mid-cap stocks led the way in the fourth quarter of 2014, with AmTrust Financial Services, Meadowbrook Insurance Group, United Insurance Holdings and Universal Insurance, each being up more than 40%.
Mixed equity performance of U.S. life/annuity carriers
During the fourth quarter of 2014, of the 24 publicly traded life/annuity companies covered in this report, small caps performed best with a return of 8.7%, followed by mid-cap ones with a return of 4.6% and lastly, the largest life/annuity companies trailed with a return of 3.0%.
Strong year for U.S. health stocks despite a changing landscape
Stock performance for the 12 health insurers comprising A.M. Best’s population for this analysis increased 15.4% in the fourth quarter of 2014 after suffering a slight pullback in the third quarter. Stock price performance for the fourth quarter was favorable for every company, with only three companies posting gains below double digits—Anthem, Inc. (5.1%), Aetna, Inc. (9.7%) and Magellan Health Services, Inc. (9.7%). All the others posted strong increases, with WellCare Health Plans posting the largest gain at 36.0%.
2015 expected to remain challenging for reinsurance
Returned capital totaled about $13.1 billion in 2014, as the reinsurers A.M. Best follows repurchased $6.6 billion of their own shares and returned about $6.5 billion to shareholders in the form of common and preferred share dividends. Of the publicly traded worldwide reinsurers (including the four top European players), just four performed better than the overall market in 2014.
