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Surging rates, possible end of SIFI propel insurers higher

Published 11/09/2016, 11:26 AM
Surging rates, possible end of SIFI propel insurers higher
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  • The 10-year Treasury yield is up a whopping 10 basis points to 1.96%, surely a boon to yield-starved insurers. But for the larger players like MetLife (MET +5.2%), Prudential (LON:PRU) (PRU +4.2%), and AIG (AIG +1.6%), they may be able to look forward to end of their SIFI designations, and the boosted regulation and capital requirements that go with it (MetLife, of course, has already won a court case challenging its SIFI designation).
  • Trump is likely to nominate two or three new Fed governors, says Capital Alpha Partners' Ian Katz, who doesn't expect Janet Yellen to seek to stay on when her term as chairman expires in 2018. He doesn't expect this to happen right away, but look for a Trump Treasury to de-designate AIG and Prudential (and presumably drop the MetLife appeal).
  • Others enjoying the higher rates: Lincoln National (LNC +6.6%), Voya Financial (VOYA +5.2%), Primerica (PRI +10.4%)

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