Life Insurance Quotes

Analyst's Outlook Provides Rise in Life Insurance Stock

10/18/11

An analyst with Keefe, Bruyette & Woods boosted life insurance companies' shares after revealing businesses shouldn't be cautious about persistently low interest rates because they don't present a threat to their balance sheets.

The analyst, Jeffery Schuman, told investors he is maintaining an overweight rating on the life insurance group Ameriprise Financial Inc. According to Bloomberg, he said stocks are usually priced low when compared to their earning potential.

Schuman's analysis sparked the stocks gain, leading to a resurgence in confidence among life insurance companies, which were worried about falling rates that might force them to pay more than they had already promised investors in universal life policy and annuity contracts, according to Bloomberg.

After an August 9 announcement by the Federal Reserve that it plans on keeping short-term rates very low until 2013 if the economy remains weak, insurer's were not confident in their stocks.

WholesaleInsurance.net reports that there has been a steady decline in life insurance policy sales in the past 20 years, making Schuman's comments even more relevant to the country's current situation. 

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