By Carlos Pallordet

LONDON, July 1 (Reuters) - US and European equity markets entered June 2025 with heightened volatility, following the robust rebound seen in May.

• European-based Stoxx 600 slipped 1.3%, sector-specific Stoxx 600 insurance lost 2.0%

• S&P 500 insurance fell 3.2% but broader S&P 500 closed 5.0% up

• Generali (-5.7%) and Swiss Re (-5.6%) were the biggest fallers in Europe

• In the US, Progressive (-6.3%) topped losses among large cap carriers

• All brokers’ shares closed down except for The Baldwin Insurance (up 11.1%)

In June 2025, volatility returned to global equity markets as geopolitical tensions escalated sharply following Israel’s surprise attacks on Iranian military and nuclear facilities mid-month.

The ensuing armed conflict between the two countries briefly unsettled markets. A temporary ceasefire brokered by President Trump provided only short-lived relief, as hostilities soon resurfaced.

On Saturday 21 June, the U.S. military conducted an operation that delivered 14 “Bunker Busters” into three of Iran’s declared nuclear facilities, after which hostilities ceased.

Despite these geopolitical shocks, US equities remained resilient, underpinned by solid corporate earnings and easing inflation expectations.

However, concerns lingered over elevated valuations and tighter credit conditions, with the Federal Reserve opting to keep interest rates unchanged and futures markets indicating only a modest likelihood of a rate cut before October.

The S&P 500 closed 5.0% higher in June, continuing the V-shaped recovery initiated in May.

In contrast, European equities faced a more difficult environment. The Stoxx Europe 600 index declined by 1.3% in June, partially reversing gains of 4.0% in the previous month.

Weak economic indicators, including a 2.4% month-on-month fall in Eurozone industrial production in April, weighed on investor sentiment.

The European Central Bank signalled a possible pause in its rate-cutting cycle, further dampening market enthusiasm.

Among regional markets, the French CAC 40 fell by 1.1%, while the UK’s FTSE 100 slipped 0.1%.

Meanwhile, Germany’s DAX index declined 0.4% in the month although it continued to outperform its European peers on a year-to-date basis, with a 20.1% gain.

Shares of Europe-listed P&C (re)insurers reflected the broader market trend, with the sector-specific Stoxx 600 Insurance Index – which also includes life insurers – underperforming the wider market with a fall of 2.0% in June.

Out of 22 listed European (re)insurers tracked by The Insurer, 14 ended the month in negative territory, with eight seeing their shares fall by 3% or more.

Italian P&C carrier Generali was the largest faller in the cohort, with shares down 5.7%.

This was followed by Swiss Re, which shed 5.6% in the month.

Its continental reinsurer peers also ended June in negative territory, with Hannover Re and Munich Re declining 4.0% and 3.6%, respectively, and Scor down 3.2%.

However, Swiss Re continued to underperform its peers on a year-to-date basis, with the Swiss reinsurer up only 4.5% in the first six month of the year, compared to 18.5% for Scor, 13.0% for Munich Re and 10.7% for Hannover Re.

Meanwhile, among London-listed insurers, Lancashire lost 5.0% in June, trading 12.7% down for the year to date, the second lowest record in the cohort for H1.

Admiral was down 2.4% for the month, while shares in Beazley and Hiscox slipped 0.9% and 0.5% respectively.

At the other end of the spectrum, Irish carrier FBD Holdings saw its shares surge by 6.9%, followed by Oslo-based Storebrand, which rose by 6.8%.

Nordic peer Protector Forsikring added 6.1% in the month, and remained the outstanding performer of the first half of 2025, with a rise of 50.5%.

THE PICTURE IN THE U.S.

Across the Atlantic, P&C insurance stocks stumbled despite the U.S. equity market experiencing a strong increase in June, with the S&P 500 benchmark rising by 5.0%, adding to gains of 6.2% in May.

The sector-specific S&P 500 insurance fell by 3.2%, reversing gains of 3.4% in May.

Out of 41 carriers tracked by The Insurer, 24 fell in June, with half of them declining by 3% or more during the month.

Palomar Holdings was the biggest faller, shedding 10.0% in the month, although it remained the third largest riser for the year to date with a gain of 46.1% in H1.

HCI Group saw the second-largest monthly fall, with shares down 9.8%. However, the coastal insurer had added 15.4% in May and still remains 30.6% higher on a year-to-date basis.

Skyward Specialty shed 8.8% in June, the third-largest monthly fall in the cohort.

Among large-cap insurers, Progressive saw the biggest fall, retreating 6.3% in the month. Arch Capital and Allstate were down 4.2% and 4.1% respectively, while Berkshire Hathaway lost 3.8%.

At the other end of the spectrum, Insurtech peers Lemonade and Hippo saw their shares jump 30.8% and 18.5%, respectively.

Heritage added 1.9% and remains the most significant riser for the year-to-date with a 106.1% in the first half of the year.

BROKERS' LOSSES

Stocks in intermediaries slipped back into the red in June, reversing the positive momentum seen in May.

All brokers’ shares closed down for the month, except for The Baldwin Insurance which surged by 11.1%.

AJ Gallagher saw the largest monthly fall, down 7.9%, although it remains the best performer on a year-to-date basis, accumulating a gain of 12.8% in H1.

Marsh McLennan lost 6.4% in June, followed by Ryan Specialty and Aon, down 5.0% and 4.1% respectively.

WTW declined 3.2% in June and remains the weakest performer on a year-to-date basis, with shares down 2.2% in the first half of the year.