BAY STREET-Soft market outlook casts shadow over insurers

Sun Nov 4, 2012 10:29am EST
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* Results seen stronger than a year ago

* Stock markets rose during quarter, bond spreads narrowed

* Insurer stocks are stronger, but investors wary

* Debt crises in Europe and U.S. could hit markets

* Canadian insurers still rise and fall on markets

By Cameron French

TORONTO, Nov 4 (Reuters) - Even if Canadian life insurers live up to expectations by posting strong third-quarter results this week, investors ought to think twice before piling into their shares given the uncertain outlook for financial markets.

With debt crises in Europe and the United States pressuring stocks and threatening another severe market downturn, analysts say one or more of the insurers could cut profit targets when they start reporting results on Wednesday.

The cautious tone comes even though the group has posted year-to-date stock gains that are mostly in the double digits.   Continued...