Equitable Holdings, Inc. (EQH) is a holding company for a diversified financial services organization. The company operates through four segments: Individual Retirement; Group Retirement; Investment Management and Research; and Protection Solutions. The Individual Retirement segment is a provider of variable annuity products. The Group Retirement segment offers tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities. The Investment Management and Research segment provide diversified investment management, research, and related services. The Protection Solutions segment focuses on its life insurance products.
Last week’s consumer price index data revealed that inflation had risen 8.6% in May from the year-ago period, the highest since December 1981. The Federal Reserve has been trying to combat the surging inflation by raising interest rates. Since the beginning of the year, the Fed has increased the benchmark interest rates thrice, with a 75-basis point increase yesterday, which happens to be the most aggressive rate hike since 1994. A rising interest rate environment usually bodes well for insurance companies, enabling them to generate better revenues. Higher bond yields increase the risk-free returns of insurance companies as they invest in high-grade fixed income instruments to meet their promised returns to policyholders.
