“With better solvency… insurance companies can build excess capital, and as a result there is more scope for risk-taking,” Mueller-Glissmann said. “This could drive re-risking in equities and a reduction in asset duration, in view of potential further increases in bond yields, which can contribute to rising longer-dated rates and steepening of yield curves.”
Investors interested in the insurance sector can take a look at the SPDR S&P Insurance ETF (NYSEArca: KIE). KIE tracks an equal weight index of insurance companies. The fund has a 0.35% expense ratio and a 1.96% 12-month yield.
Additionally, the Dow Jones U.S. Insurance Index Fund (NYSEArca: IAK) tracks a large-cap weighted index of insurers. Consequently, the fund is slightly more top heavy and leans toward property and casualty insurance companies. IAK has a 0.47% expense ratio and a 1.60% 12-month yield.
For more information on the insurance industry, visit our insurance category.
Max Chen contributed to this article.