TORON­TO-Af­ter steep loss­es in 2011, life in­sur­ers are sud­den­ly among the hottest plays on the Cana­di­an mar­ket, though the stocks may have trou­ble build­ing on their gains giv­en a murky prof­it out­look and re­cent changes in their busi­ness mix. With a 13 per cent rise over the past two weeks, In­dus­tri­al Al­liance leads a group that has been hit hard since the fi­nan­cial cri­sis in 2008.

The group was caught flat-foot­ed by the stock mar­ket plunge in 2008, which caused loss­es on their guar­an­teed in­vest­ment prod­ucts. Since then, volatile stocks and falling bond yields have forced them to take charges to guar­an­tee fu­ture oblig­a­tions, fur­ther hit­ting their share prices. A re­cent rise in bond yields-spurred by a mar­ket-friend­ly com­ments from the US Fed­er­al Re­serve this month and health­i­er US eco­nom­ic da­ta-has brought back in­vestors ea­ger to catch a re­cov­er­ing sec­tor on the up­swing.

But an­a­lysts cau­tion that while the rise in bond yields is def­i­nite­ly a pos­i­tive for the com­pa­nies, it's too ear­ly to say they're out of the woods.

Reuters