Rising Interest Rates Won't Drive Insurers Away From The Market

By Jessica Alling – Jun 19, 2013 at 3:10PM

NYSE: BRK.B

Berkshire Hathaway

Market Cap

$881B

Today's Change

(-0.68%) -$2.79

Current Price

$405.95

Price as of April 24, 2024, 4:00 p.m. ET

When rates begin to move back to a normalized environment, there are sure to be changes. Don't be scared.

With the speculation over changes in Fed policy driving a lot of the activity in the market these days, it's important for investors to know how rising interest rates will effect various companies. With interest rates playing a central role in the business model for insurance companies, AIG (AIG 0.05%) Berkshire Hathaway's (BRK.B -0.68%) Geico, Allstate (ALL -1.72%), and other insurers may be anxious to get back to a normalized rate environment.

In the video below, Motley Fool contributor Jessica Alling discusses high-level changes the insurers might face and how long-term investors should be approaching the oncoming transition.

Fool contributor Jessica Alling has no position in any stocks mentioned -- you can contact her here. The Motley Fool recommends American International Group and Berkshire Hathaway. The Motley Fool owns shares of American International Group and Berkshire Hathaway and has the following options: Long Jan 2014 $25 Calls on American International Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.