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Wednesday, Sep 18
Life insurers smacked down by Fed decision
- Almost everything rose in reaction to the Fed’s surprise policy statement - except life insurers: MetLife (MET -2.5%), Lincoln National (LNC -2.4%) and Prudential (PRU -1.7%) all fell sharply.
- It’s not hard to see why, Ben Levisohn explains: Life insurers take in premiums, pay out what they must and invest the rest; higher interest rates and bond yields would have made the companies more profitable since they would have earned more on their excess cash, but instead, yields are falling and rates likely will remain lower for longer than expected.