SLF - Life insurance stocks get slammed on new COVID variant fears

Life insurance stocks including Brighthouse Financial (NASDAQ:BHF), MetLife (NYSE:MET), Prudential (NYSE:PRU), Lincoln National (NYSE:LNC) and Manulife (NYSE:MFC) gap lower amid rising fears evolving around the new COVID-19 variant in South Africa. If the variant continues to spread globally, insurers' mortality rates may rise in the fourth-quarter. Most life insurance stocks trade in net negative territory on a M/M basis, but enjoy double-digit returns Y/Y, as seen in the chart below.  Even in the prior quarter, "The main area where we have seen tailwinds is from elevated COVID claims, MetLife President and CEO Michael Khalaf says in the company's Q3 conference call. Still, Q3 "looks very much like the first quarter with exceptionally strong VII more than offsetting excess mortality." Specifically, "underwriting in our U.S. business, the Group Life mortality ratio was elevated at 106.2% in Q3 on higher claim severity and frequency due to a shift in the age distribution

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Life insurance stocks get slammed on new COVID variant fears