Investors are turning to insurance stocks as a relatively safe haven amid nervousness that the tech and artificial intelligence-related rally may have run out of steam.

Bermudian-based insurers and reinsurers, many of which trade on US stock exchanges, have been notable beneficiaries of this rotation to defensive sectors over the past two months.

As of the close of trading yesterday, the share prices of both Axis Capital and RenaissanceRe had risen by more than 20 per cent since the start of June, while Arch Capital had recorded a 19 per cent gain.

This marks a stark contrast from the broader market, with the S&P 500 Index down 2.3 per cent over the same period.

Tech giants’ multibillion-dollar investments in AI, including the building of vast new data centres, has caused investors to question whether or when the enormous capital expenditure will generate returns that warrant the scale of capital spending.

The S&P 500 Insurance Industry Index yesterday hit an all-time high, with brokers some of the top performers. Marsh & McLennan and Willis Towers Watson both jumped by more than 4 per cent for the day, while Aon surged more than 3 per cent.

Bloomberg Intelligence analyst Matthew Palazola said yesterday: “It’s unsurprising to see insurers as a safe haven given their defensive nature and the possibility of higher-for-longer interest rates boosting investment income and pushing peak return on equities out a little further.”

He added that property and casualty insurance “fundamentals have remained solid through early 2Q results, albeit underperforming on growth,” he added.

Jonathan Krinsky, chief market technician at BTIG, quoted by investment publication Barron’s yesterday, said that since early June investors have rotated into non-tech defensive sectors such as insurance, healthcare, and real estate as technology momentum cooled.

However, Mr Krinsky cautioned that the trade may now become crowded and could reverse if investors return to Big Tech after earnings.