Insurers benefit significantly from rising interest rates as their underlying bond investments yield high returns. Last month, the Federal Reserve paused rate hikes for the first time in 15 months. However, despite the lower-than-expected increase in inflation in June, the central bank is expected to raise interest rates again this month. This will likely benefit insurers.
Therefore, it could be wise to add fundamentally strong insurance stocks Hannover Rück SE (HVRRY), Reinsurance Group of America, Incorporated (RGA), SiriusPoint Ltd. (SPNT), and International General Insurance Holdings Ltd. (IGIC) to one’s portfolio.
