US insurance composite slid 2.2% last week as markets fell following federal budget approval

(The Insurer) - The North American insurance composite compiled by Stonybrook Capital and Weild & Co underperformed all major market indexes last week and is now up just 3.6% for the year to date, trailing the broader Wall Street benchmarks over the same period.

The Dow Jones Industrial Average declined 1.0% last week, while the S&P 500 index and the tech-heavy Nasdaq-100 contracted by 0.3% and 0.4%, respectively.

Meanwhile, the small-cap Russell 2000 benchmark was down 0.6%.

Stonybrook-Weild highlighted that the bond market had anticipated news of the adoption of the federal budget on July 4, with yields rising during the days before the federal holiday.

“Continuing the current tax rates past their previously scheduled expiration is projected to reduce tax revenues by $4.5 trillion over the next decade and deficits to rise by $3.3 trillion, according to the 'static' analysis of the Congressional Budget Office,” the investment banks said.

“Gold, silver, and oil prices have trended up on the budget news as deficit projections cause investors to fear higher U.S. inflation,” they added.

Stonybrook-Weild added that the U.S. had reported a $27 billion trade surplus in June for the first time in years, albeit that compared to a $316 billion deficit in May.

“This shows that tariff policy can influence trade volumes,” they said.

“Negotiations continue with some of America’s largest trading partners. A fear is that unsuccessful negotiations could trigger higher inflation, a slowdown in economic growth and employment, or both. Continuing uncertainty also hampers business confidence,” they concluded.

In the North American insurance composite, advancers trailed decliners by 15 to 96, with all groups declining in the week.

The two best-performing groups were global brokers and reinsurers, down 1.0% and 1.1%, respectively.

Among the former, Aon and WTW remained in positive territory, eking out gains of 0.3% and 0.2%, respectively

Arthur J Gallagher's shares fell 2.1% while leader Marsh McLennan lost 1.6%.

Among the group of reinsurers, SiriusPoint and Greenlight Capital Re experienced the largest fall, with both ending the week 7.1% lower.

London-listed Conduit Holdings was down 3.3% while RenaissanceRe declined 1.7%.

In contrast, Everest Group, the largest company in the cohort by market capitalisation, rose 0.6%.

The two worst-performing groups in the composite were title insurers, down 8.7%, and coastal insurers, down 6.6%.

Among the latter, Universal Insurance and Heritage suffered the largest declines, dropping 8.7% and 8.5%, respectively.

Newly listed Slide Insurance Holdings, which is now the largest company in the cohort by market capitalisation, lost 7.7%.

Meanwhile, shares in HCI Group fell 5.3%

The group of personal lines insurers was also among the weakest performers in the composite, with the cohort falling by 5.3% in the week.

Shares in leader Progressive were down 6.4% while Allstate, the second largest company in the group, shed 2.4%.

Insurtech Lemonade recorded the largest fall in the group, down 10.1%, followed by Hippo and Kingstone Companies, down 7.6% and 7.3%, respectively.

The Stonybrook-Weild North American insurance composite is up 3.6% on a year-to-date basis.

In this article, we have included a selection of industry comp tables published in full by Stonybrook and Weild & Co in their weekly update.