Correlation between Insurance Index and S&P500

insurance-life-sp500-graph-correlationThe Financial sector of the US stock market includes 4 subcategories related to the insurance industry: Accident and health, life, property and casualty and miscellaneous insurers. All four insurance indices are lagging behind S&P500 index according to 5-year financial charts and are suffering considerable losses. Life insurance index in particular dropped 53%. Although there are exceptions of business insurance companies outperforming S&P500 like Berkshire Hathaway (up 16% since July 2007), most insurance stocks lost more than the S&P500 10% loss during the last 5 years, such as American International Group (NYSE:AIG), shares of which once traded for more than $1,500 and are now trading for $30 a piece!


Accident and Health insurance index comes second having lost almost 30% since summer 2007. The six top insurers of this category with over 10B market cap show mixed performing results. UnitedHealth Group (NYSE:UNH) and Humana Inc (NYSE:HUM) both gained more than 14% since July 2007, whilst shares of Wellpoint (NYSE:WLP), AFLAC (NYSE:AFL), Aetna (NYSE:AET) and CIGNA Corporation (NYSE:CI) lost between 15 and 22% during the same period.


Miscellaneous insurance index is much more correlated with the S&P500 index. Despite the gains of Marsh & McLennan Companies (NYSE:MMC) and Aon PLC (NYSE:AON), the index is down 20% since 6th of July, 2007.


Finally, property and casualty insurance index is much closer to S&P500 index nowadays, although the index graph available at Google finance begins from July 6, 2011. The index includes some of the most famous insurers, like Berkshire Hathaway (NYSE:BRK) and AIG.