Insurance related exchange traded funds (ETFs) could see increased activity as California’s major insurers face significant claims in the weeks and months ahead. Raging wildfires engulfed at least 1,500 homes and caused economic losses of at least $1 billion. As a result, State Farm said that as of late Tuesday it had received 1,351 claims and reports of 251 homes being destroyed, and the totals will certainly increase. In addition, some of the biggest employers in the San Diego area have shut down some or all of their operations, including Jack in the Box (JBX), Sempra Energy (SRE), Petco Animal Supplies, and Qualcomm (QCOM), reports BusinessWeek.
Some of the insurance ETFs that could be affected by this include:
- iShares Dow Jones U.S. Insurance (IAK) – IAK’s top three holdings include American International Group (AIG) at 24.0%, Prudential Financial (PRU) at 7.1% and Allstate (ALL) at 5.3%. Currently, it’s down 3.7% year-to-date.
- KBW Insurance ETF (KIE) – KIE’s top three holdings include Metropolitan Life Insurance (MET) at 8.8%, Prudential Financial (PRU) at 8.4% and American International Group (AIG) at 8.3%. Currently, it’s down 1.9% year-to-date.
- PowerShares Dynamic Insurance (PIC) – PIC’s top three holdings include Prudential Financial (PRU) at 5.3%, Lincoln National (LNC) at 5.3% and Chubb (CB) at 5.1%. Currently, it’s down 3.8%.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.