Keefe, Bruyette & Woods view life insurer's reinvigorated attention to fundamentals and valuation as a positive sign for 4Q earnings and an antidote to low interest rates.
Keefe, Bruyette & Woods (KBW), a global, full-service investment bank that specializes in the financial services sector focusing on banking and insurance companies released the findings in their Life Insurance-4Q11 Earnings Preview.
In the face of a considerably disappointing 2011, life stocks are currently outperforming during a rally that began in late December of last year. Life stocks are rising an average of 11% vs. 6% for the S&P 500 according to KBW. Oddly enough, the market rally is taking place while there has been no change in interest rates or European credit spreads.
Although KBW recognizes that the surge in performance may be short-lived, they still recommend an overweight (the security is expected to outperform its industry, sector and the market all together) stance when it comes to the life sector.
