North American insurance stocks rose 4% last week but trailed broader market

By Michael Loney

April 14 - (The Insurer) - The North American insurance composite compiled by Stonybrook Capital and Weild & Co rose 4.0% last week, trailing most broad market indices.

The S&P 500 finished up 5.7% for the week, while the Nasdaq 100 was up 7.4%. In contrast, the Russell 2000 Small Cap Index was up only 1.8%. However, year to date the S&P 500 is down 8.8%, Nasdaq 100 is down 11.5% and Russell 2000 Small Cap Index is down 16.6%.

“Policy chaos ripped through equity, debt and currency markets this week, as various countries either retaliated on tariffs, negotiated, or counter-retaliated, in the case of China,” Stonybrook and Weild said.

“This has been a stressful time: the VIX ‘Fear’ index, which was at only 16 two weeks ago, spent the week hovering at the near-record level of 50, until Wednesday's decision to declare a 90-day moratorium on most tariffs. It still ended the week above 37.5,” they continued.

The heightened VIX translates to a rising cost of hedges and wider spreads on many financial products.

Stonybrook and Weild said that interest rates also rose sharply last week. They warned that “investors are not out of the woods."

“Offers of trade negotiations need to succeed. China remains a point of instability. It is the world’s second largest economy, the third largest U.S. trading partner (after Mexico and Canada), and the second largest foreign owner of U.S. Treasuries,” they said.

In the North American insurance composite, 11 out of the 12 groups advanced last week, with larger cap names significantly outperforming the smaller cap names.

The two best performing groups were micro cap insurers, up 7.9%, and other broker and distributors, up 6.4%.

The two worst performing were title insurers, down 1.2%, and standard commercial insurers, up 1.1%.

In the global P&C group, Berkshire Hathaway was up 5.6%, AIG was up 3.8% and Chubb was up 1.0%.

In the reinsurers group, Conduit Holdings was the best performer, rising 5.9%, followed by Everest Group (up 3.7%), Reinsurance Group of America (up 3.3%) and RenaissanceRe (up 2.3%).

The specialty commercial insurers group had mixed performance.

The top performers were Palomar (up 11.0%), James River (up 9.1%), International General Insurance (up 6.6%), Skyward Specialty (6.0%) and Kinsale Capital (up 5.1%).

In the global brokers group, Arthur J Gallagher rose 4.6%, Willis Towers Watson rose 4.2%, Marsh McLennan rose 1.4% and Aon inched up 0.1%. Gallagher on Thursday announced that it had closed its $1.2 billion acquisition of Woodruff Sawyer.

The Stonybrook-Weild North American Insurance composite is up 6.8% 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.