Shares in the Life Insurance sector have been on a steady upward trajectory since the turn of the year, after a relatively static 2016 (apart from a Brexit blip). Leaders today were Standard Life, Prudential and Aviva as the pack went on rising.
Many analysts were of the opinion that Donald Trump’s policies were pointing to higher interest rates in the US, which would probably put a squeeze on insurance companies. But so far the opposite seems to be playing out.
A news piece on Sharecast just last week stated, “Traders cited comments from US president Trump during the afternoon saying he would have “something phenomenal” on taxes over the next two to three weeks as a reason for the uptick in ‘risk appetite’”. This lead to a bounce of Banking and Insurance stocks, and government bond yields, in the USA.
As for the UK Life Insurance sector , in the chart below you can see it is now trading above the 2016 highs and seems to have strength.
Aviva, one of the UK’s largest insurance companies is back on the rise. After correcting slightly in January, it’s now bouncing again and headed up above £5.00 per share.
Standard Life also seems to have its mojo back, with a sharp rise in February to a high of around £3.70 a share.
Prudential is also following the sector trend, with a solid rise above 15.00 in December and holding that level ever since. Looking like it will break on, or at very least retest, the 2017 highs.
As 2017 progresses and stance on interest rates becomes clearer, not just in the UK but also the USA, the sector may go through some bumpy patches. However, it could offer a nice dip to a support for any long term positions.