More gains ahead for life insurers

|By:, SA News Editor

Deutsche's Yaron Kinar may have downgraded Prudential (PRU -0.9%) this morning, but he's not bearish on the life insurance sector. The Pru move was about valuation and the company's relative lack of interest rate sensitivity.

Those who stand to benefit more from higher rates had their price targets lifted: Buy-rated MetLife (MET +0.4%) is upped to $59 from $57 and Lincoln National to $56. Hold-rated Torchmark (TMK -0.5%), Unum (UNM -0.3%), and Principal Financial (PFG -0.1%) also had their targets raised.

He notes current valuations imply about a 3% 10-year Treasury yield a year from now, but the taper could see the 10-year to 3.5% or higher, along with expectations from further increases.

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