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The run in life insurance stocks may be drawing to a close, Morgan Stanley analysts said Wednesday.

The sector has surged 50% in the last three months, and shares in companies including Allstate Corp. (ALL), Prudential Financial Inc. (PRU) and Unum Group (UNM) have jumped from their March lows.

By contrast, shares in publicly traded major life insurers were trading at lower levels Wednesday, in line with a subdued market awaiting news on interest rates from the Federal Reserve. Allstate shares are up 1.4% to $30.63, Prudential's are down 1.5% to $51.24 and Unum's are off 1% to $22.23.

"From here, we expect appreciation to be more in line with the broader market," Morgan Stanley analyst Nigel Dally wrote as he cut the firm's view of life insurers from attractive to in-line.

Prudential, whose stock is up 72% this year, was singled out, in part over commercial real-estate worries.

Challenges in commercial real estate are likely to hold earnings back in both the company's investment portfolio and in asset management over the next few quarters, the analysts predicted as they cut their rating on Prudential's stock to equal weight from overweight.

The analysts also cut Unum Group to underweight from equal weight, "purely on relative valuation."

Officials at Prudential could not immediately be reached for comment.

Nearly a month ago, Dally warned of "ratings migration" at life insurers, as the companies are forced to hold more capital when the bonds they hold are downgraded.

-By Brendan Conway, Dow Jones Newswires; 212-416-2670; brendan.conway@dowjones.com