JPMorgan Expects Improvement In Life Insurance Sector (AFL, PRU)

JPMorgan analysts feel that life insurance stocks would not trade in individual company fundamentals. Instead, they will continue to move as a sector on a macro trend, outperforming the broader markets over the next year. Though the firm feels that the equity market drop in 2Q10 would pressure near term results, only potential deterioration in the CRE market and low interest rates continue to concern them, as gradual regeneration of 10.3% ROE in 2010 and 10.7% in 2011 returns and recovery of weak sales and net returns show brighter signs. They picked AFLAC Incorporated AFL and Prudential Financial, Inc. PRU as the best performers while reducing EPS estimates for others.