The Money Bin

In the week to 1 May the FTSE All Share rose 1.2% vs. the Insurance Index at +0.5% and 0.9% for the Lloyd’s Index. The best performer was JLT (+2.5%); Beazley (-0.2%) was the worst performer. The Q1 reporting season has begun: newsflow has been mixed with a number of US insurers reporting improved PBT/rates, but also loss creep, higher Q1 losses and warnings from brokers about stalling rate rises ahead of the key Jun/Jul US renewals. The 2018 hurricane season starts 1 June with consensus for sli

The Money Bin

In the week to 24 April the FTSE All Share rose 2.6% vs. the Insurance Index at +1.8% and 0.0% for the Lloyd’s Index. The best performers were Helios* (+7.0%) and Beazley (+1.5%); Hiscox (-1.1%) was the worst performer. Following last week’s analysis of the issue of underinsurance with the 2017 cat losses, we look at the growing risk of a Californian earthquake – not necessarily in San Francisco but along the Hayward Fault. Latest analysis suggests an insured loss of cUS$30bn but an economic los

The Money Bin

In the week to 17 April the FTSE All Share fell -0.3% vs. the Insurance Index at +0.5% and +0.2% for the Lloyd’s Index. The best performer was Lancashire (+4.0%); Helios* (-2.3%) and JLT (-0.8%) were the worst performers. Swiss Re’s sigma analysis of the 2017 insured losses highlights the material protection gap. It estimates the total insured losses from the 2017 catastrophes at US$144bn vs. total economic losses of US$337bn, giving a cat risk protection gap of US$193bn (57%). Herein lies a pot

The Money Bin

In the week to 10 April the FTSE All Share rose 3.0% vs. the Insurance Index at +1.5% and +0.8% for the Lloyd’s Index. The best performer was Hiscox (+3.0%); Lancashire (-2.2%) was the worst performer. We look at the first forecasts for the 2018 hurricane season. These early estimates suggest a slightly elevated level of windstorm activity – and an increase in US landfall probability. Of course, it is the if/where of the latter that holds the greatest risk of insured loss and, in 2018, will be a

The Money Bin

In the week to 3 April the FTSE All Share rose 0.4% vs. the Insurance Index at +0.8% and +0.8% for the Lloyd’s Index. The best performer was Lancashire (+2.8%); JLT (-1.9%) was the worst performer. This week we review the 1 April renewals, where prices were as muted as we expected. Ongoing competition dampened rate movements where accounts were loss free. It was always going to be a big ask to get those not affected by the 2017 cats to pay up – and they didn’t. Interestingly, M&A is picking up,

The Money Bin

In the week to 27 March the FTSE All Share fell -1.0% vs. the Insurance Index at -1.8% and 0.2% for the Lloyd’s Index. The best performer was Beazley (+4.3%); Helios* (-3.1%) and Hiscox (-1.6%) were the worst performers. We remind investors of the growing cyber hacking threat to energy providers, especially in the US. Several speciality insurers are already teaming up with energy experts, eg Beazley and Energy Insurance Mutual, to look to provide customised cover for this risk but the insured ex

The Money Bin

In the week to 13 March the FTSE All Share rose 0.1% vs. the Insurance Index at +1.7% and +3.3% for the Lloyd’s Index. As M&A speculation rose among the Bermudian underwriters, the best performer was Hiscox (+6.4%); Lancashire (-1.3%) wasthe worst performer. We often talk of the band of global specialist (re)insurers that Beazley, Hiscox and Lancashire belong to. In the table below, we rank the key players by market cap (in USD), splitting out the major European players. What stands out is the P

The Money Bin

In the week to 6 March the FTSE All Share fell -1.6% vs. the Insurance Index at -2.7% and -0.3% for the Lloyd’s Index. The best performer was Lancashire (+3.3%); JLT (-6.4%) post its FY17 results, was the worst performer. This week we look at the data on actual US property/casualty rate changes in Q4 2017 and Jan 2018. This has a bearing on the outlook for (re)insurers and the drivers behind the latest M&A moves ie the AXA bid for XL Catlin at 1.5x NAV/2.0x TNAV and AIG’s acquisition of Validus

Non Life Insurance

2017 tested the global re/insurance market but we believe the quoted Lloyd’s insurers responded well. The results also highlighted the very different underwriting strategies, especially between Lancashire and Beazley/Hiscox. Lancashire’s underwriting loss, given the 2017 catastrophes, should not have surprised shareholders, nor the fact that Hiscox had an FX exposure. In this report we review the FY results in more detail.

The Money Bin

In the week to 27 February the FTSE All Share rose 0.5% vs. the Insurance Index at +1.9% and +1.3% for the Lloyd’s Index. The best performer was JLT (+5.6%); Helios* (-3.7%) and Beazley (-1.6%) were the worst performers. This week we review the FY2017 results from Beazley, Hiscox and Lancashire. Beazley reported the highest PBT and ROE (8.7%), helped by a strong investment yield. Lancashire’s loss was expected given its higher cat/reinsurance exposure and the 2017 losses. Hiscox was hit by FX lo

The Money Bin

In the week to 20 February the FTSE All Share rose 1.3% vs. the Insurance Index at +1.2% and -1.9% for the Lloyd’s Index. The best performer was JLT (+0.2%); Lancashire (-14.6%) was the worst performer, reflecting the (overdone in our view) share price fall post its FY17 results. This week we look at the wide range of combined ratios being reported for 2017. The variation reflects the portfolio split, (short/long/cat etc), as well as the quality of underwriting (cf Aspen closing its unit). NB a

Non Life Insurance

In this Cyber Bytes we look in more detail at two recent cyber reports from Beazley (fraud) and Hiscox (cyber readiness). Beazley flags the increased threat from fraudulent instruction scams, which quadrupled in 2017 for its clients. Hiscox’s more in-depth report found that c73% of organisations surveyed in Europe and the US were unprepared for cyber attacks. Not surprisingly, the smaller firms fared worse than larger firms. Ahead of GDPR coming into effect on 25 May 2018, only 33% of all respon

The Money Bin

In the week to 13 February the FTSE All Share rose 0.4% vs. the Insurance Index at +3.6% and +2.7% for the Lloyd’s Index. The best performer was Beazley post its FY17 results (+4.8%); JLT (-0.6%) was the worst performer. We review the recent Alpha (Lloyd’s) Market Analysis. It reports a wide range of rate rises for most short tail lines at January 2018 and suggests there is potentially more to (gradually) come despite a ‘disappointing’ reinsurance renewal. This supports our view of rates: we con

A strong FY result in a difficult year

Beazley’s FY17 PBT of US$168.0m was in line with our expectations and is a strong result given the 2017 cat losses, in our view. The 8.7% ROE is impressive, and represents a return several peers would be pleased to report even before the 2017 cats. Whilst much of the PBT was driven by a very strong investment return (2.9%), Beazley still delivered a small underwriting profit, boosted by a strong contribution (underwriting/reserve release) from Speciality Lines (now 55% of the book), underpinning

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

BlackRock World Mining

BRWM’s managers: we see all the classic signs of high commodity prices...

Jupiter Green

JGC’s fundamental story continues to show resilience, but the discount remains wide…

Lowland Investment Company - Is the tide turning?

Lowland Investment Company’s (LWI’s) unconstrained, multi-cap investment policy differentiates it from most peers in the AIC UK Equity Income sector. It offers investors broad market exposure, outside of the large, traditional ‘income stocks’ at a 13% discount to NAV. The underperformance of small- and mid-cap companies versus larger peers has slowed and a turnaround would be very positive for LWI. Portfolio returns are already benefiting from acquisition activity, spurred by low valuations, and

NextEnergy Solar Fund – High- and growing-income opportunity?

NextEnergy Solar Fund (NESF) is almost 10 years old. Since launch, it has built a £1.2bn, 933MW portfolio of 100 operating solar assets, powering the equivalent of over 330,000 homes, declared dividends totalling £333m, and avoided the emission of about 2.2 Mt CO2e. NESF is on track to pay 8.35p in dividends, with forecast dividend cover of about 1.3x. Share price weakness that has afflicted the whole sector means that dividend translates to a yield of 11.1%, one of the highest in its sector, a

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25

Primary Health Properties - Strategic and accretive Irish expansion

Primary Health Properties (PHP) has agreed to acquire Ireland’s first Enhanced Community Care (ECC) facility for a total consideration of €30m. With its interim results, PHP highlighted its continued plans for strategic expansion in Ireland, where higher yields support accretive investment in an expanding market. Alongside low-risk, value-creating asset management schemes and accelerating organic rental growth, this represents a key opportunity for continuing growth in income. Our forecasts are

Building a robust platform for growth - FY24 pre-close statement

Against a tough trading background in FY24, Speedy Hire has taken steps to build a platform for long term sustainable growth through the launch of its Velocity strategy. While progress has been more strategic than financial in the year – although we note positive underlying cash flow was achieved - new business wins, the acquisition of Green Power Hire and a transitioned B&Q model all suggest that profitability is likely to move ahead again from FY25 onwards. Speedy’s FY24 pre close statement e

abrdn Private Equity Opportunities – On the way to greener pastures?

Despite navigating through what its managers considered to be challenging conditions in 2023, abrdn Private Equity Opportunities (APEO) was able to report both positive NAV growth and double-digit share price returns in its recently published annual results. APEO’s discount has narrowed by more than 10% in recent months, so that it is trading on a 28.9% discount currently, narrowing from about 45% last October. These figures were generated over a period that saw a slowdown in activity in Europea

Vanquis Banking Group+ (VANQ, House Stock, 47p) - Deep value

VietNam Holding - Introducing redeemable shares

VietNam Holding (VNH) posted a solid net asset value (NAV) per share total return (TR) in 2023 of 15.8% (22.4% in US dollar terms), outperforming the Vietnam All Share index (VNAS), which posted an 11.7% return, and its direct peers. The investment manager remains confident that 2024 will be strong for Vietnamese equities, underpinned by average 20% y-o-y expected earnings per share (EPS) growth. VNH recently introduced a share redemption facility (on top of regular share buybacks), which allows

Murray Income Trust - Delivering income and capital growth

Murray Income Trust (MUT) invests in high-quality, mainly UK-listed stocks. It has achieved both its dividend and capital growth objectives over the long term. The trust boasts 50 years of continually rising dividends. It paid a dividend of 37.5p per share in FY23 (ended 30 June 2023 (FY22: 36.0p)), and the board has indicated the dividend will rise to at least 38.0p in FY24. This represents a prospective yield of 4.5%. Late last year the company decided to take action to allow shareholders to a

UK Equities: Overlooked, oversold, and over here

In this note we look at the gap between perception and reality in the UK equity market, the opportunities and threats in the economic and market outlook, and the emerging consensus that the valuation discount versus other major markets is at or close to an inflection point. We consider the benefits of UK equity strategies both for income investors and for those seeking exposure to the higher growth potential of smaller and mid-cap companies.

Bigger and better

Agronomics - A unique offering in a rapidly developing sector

Agronomics (ANIC) invests in cellular agriculture companies. Since mid-2022 it has placed increasing emphasis on companies using precision fermentation technology or providing contract precision fermentation services, as these appear to have greater near-term commercial potential than cultivated meat and seafood. Agronomics’ NAV has risen almost 100% since the inception of the current strategy in April 2019, and looks set to increase further as the company’s portfolio holdings receive regulatory