Insurance stocks were mixed in a week where equity markets worldwide were overshadowed by geopolitical tensions over the conflict between Russia and Ukraine.
International news headlines were dominated by the prospects of military conflict in Ukraine, especially late in the week as accusations flew over cyberattacks on financial institutions and explosions in separatist-held parts of the country. Equity markets finished the week ending Feb. 18 on two consecutive down days, with the S&P 500 losing 1.19% to fall to 4,348.87, while the S&P 500 Insurance index declined 0.42% to 561.10.
American International Group Inc.'s shares ticked up as the company this week disclosed fourth-quarter 2021 net income of $3.74 billion, or $4.38 per share, compared with a net loss of $60 million, or a loss of 7 cents per share, in the fourth quarter of 2020.
CFRA analyst Cathy Seifert said in an interview that AIG's quarterly results beat on both the top and bottom line and reflected strong property and casualty results. Seifert also noted that the insurer is making progress on its restructuring and efforts to separate its life and retirement unit into a separate entity. The company said during its earnings conference call that it is aiming to launch an initial public offering for SAFG Retirement Services Inc., the holding company for its life and retirement business, in the second quarter.
Shares of AIG rose 1.63% on the week.
Market reaction to United Fire Group Inc.'s earnings was strong as the company reported fourth-quarter 2021 net income of $57.7 million, compared with a net loss of $8.9 million in the same period of 2020.
During the insurer's earnings call, interim co-CFO Randy Patten said
United Fire finished the week among the biggest winners, soaring 25.04%.
The Progressive Corp. and The Travelers Cos. Inc. were much more flat on the week, gaining 0.20% and losing 0.66%, respectively. The Allstate Corp. added 2.03%.
"Most property and casualty insurance stocks outperformed the broader market this week as investors rotate into value names with attractive catalysts, like an improved pricing environment," Seifert said.
In the reinsurance space, Reinsurance Group of America Inc. closed a longevity reinsurance transaction with the Netherlands' NN Life covering approximately €4 billion of underlying reserves.
Piper Sandler analyst John Barnidge in a research note called the deal an "incremental positive" that offers a natural hedge to the company's mortality reinsurance business.
RGA finished the week up 1.51%.