Life Insurers Seek Higher Returns Despite Short interest
15 December 2011 London
Image: Shutterstock
The life insurance industry has been forced to adjust against a backdrop of exceptionally low interest rates in search of higher returns. In doing so, some names have attracted the attention of short sellers.
Stocks covered include:
Moves by giants Sun Life Financial and Standard Life Assurance have seen the industry gradually realize it needs to adapt its policies in the face of volatile stock markets and the low interest environment, which increasingly seem to be the norm. The industry is moving away from individual life insurance policies and towards products that provide more reliable returns.
Most shorted
The top 10 most shorted names are dominated by US stocks and all see short interest well above average levels of 2% of the total market cap. This is based on a screen of the 66 global life insurance stocks sourced from CapitalIQ with a market cap’ of greater than USD 1 billion.
Sun Life Financial Inc (SLF) and Stancorp Financial Group Inc (SFG) top the list with 9% of their total shares outstanding on loan. Investors reacted positively to Sun Life Financial’s growth plans announced earlier this week, which included plans to discontinue two U.S. products, leading to the share price rebounding from new annual lows. Although the heavily shorted stock has been subject to negative investor sentiment as the share price has halved over the year, short interest has remained flat at 9% of total shares.
In contrast to Sun Life Financial, Stancorp Financial Group has caught the eye of the short sellers following a surge in the share price from annual lows reached in September. Short interest has increased by a quarter to 9% of total shares, reaching a new annual high.
Source: Data Explorers
Stocks covered include:
Moves by giants Sun Life Financial and Standard Life Assurance have seen the industry gradually realize it needs to adapt its policies in the face of volatile stock markets and the low interest environment, which increasingly seem to be the norm. The industry is moving away from individual life insurance policies and towards products that provide more reliable returns.
Most shorted
The top 10 most shorted names are dominated by US stocks and all see short interest well above average levels of 2% of the total market cap. This is based on a screen of the 66 global life insurance stocks sourced from CapitalIQ with a market cap’ of greater than USD 1 billion.
Sun Life Financial Inc (SLF) and Stancorp Financial Group Inc (SFG) top the list with 9% of their total shares outstanding on loan. Investors reacted positively to Sun Life Financial’s growth plans announced earlier this week, which included plans to discontinue two U.S. products, leading to the share price rebounding from new annual lows. Although the heavily shorted stock has been subject to negative investor sentiment as the share price has halved over the year, short interest has remained flat at 9% of total shares.
In contrast to Sun Life Financial, Stancorp Financial Group has caught the eye of the short sellers following a surge in the share price from annual lows reached in September. Short interest has increased by a quarter to 9% of total shares, reaching a new annual high.
Source: Data Explorers
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