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

Watch and wait

JLT’s FY2017 results were solid with overall good growth in Risk & Insurance and Employee Benefits (EB). The return to 5% organic growth was encouraging. The flagged headwinds and another cost transformation programme have caused some understandable indigestion: we believe the FD will ensure the cost savings are delivered by 2020. We concur that JLT must position itself as a global specialist (which means US expansion and IT systems/data investment) if it is to stay relevant - and continue to co

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

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

FY17 one step forward, 2018….

FY17 PBT (Norm) was broadly in line at £191.5m/EPS 58.5p. The 34.0p dividend was slightly better than we forecast. The story has always been about FY19 and beyond, when US Speciality comes on line as a profit stream, but (new) headwinds in FX and IFRS15 will act as a drag on revenue. JLT is also to embark on a Transformation Programme to cut costs by £40m by 2020. The strategy to create a global specialist broker makes sense/offers upside - but it’s all about delivery given another deferral of r

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

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

The Money Bin

In the week to 6 February the FTSE All Share fell -5.8% vs. the Insurance Index at -3.4% and -5.3% for the Lloyd’s Index. The sector was inevitably caught up in the recent market correction, but valuations remain pretty robust. The best performer was Beazley (-3.6%); Hiscox (-7.0%) was the worst performer. The FY17 results season has kicked off: Beazley reports today, then Lancashire and Hiscox. We provide a broad comparison of the three insurers to highlight their differences – and a guide as t

Insurance weekly

In the week to 30 January the FTSE All Share fell -1.8% vs. the Insurance Index at +0.7% and -0.1% for the Lloyd’s Index. The best performer was Hiscox (+1.8%); JLT (-3.4%) was the worst performer. Allianz’s 2018 Risk Barometer reviews perils from more of an insurer viewpoint than the WEF survey. For the first time, BI and Cyber risk exposure are seen virtually on a par. Following the 2017 losses, natural catastrophe risks are back in the top three. Fear drives demand: encouragingly these are ma

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

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

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

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

Hybridan Small Cap Feast - 22 April 2024

22nd April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

Foxtons Group (FOXT LN) - 1Q24 IMS shows real momentum

Foxtons Group plc first quarter revenue rose 9% to £35.7m (1Q23: £32.9m) with growth delivered across all business segments. Trading is in line with management's expectations.

Morning Note – 29 February 2024

Jupiter Green

Hardman & Co Insight - Asset managers had a poor 2022

Asset managers had a poor 2022: the S&P Composite 1500 Asset Management Index was down 22% and, according to the Investment Company Institute (ICI), worldwide mutual funds fell by 20%, from $76tr to $60tr. When bond and equity markets fall, the results are unlikely to be pretty: with revenues trending down and multiples contracting, there is a double whammy to contend with. So how do valuations shape up now, after a bullish start to the new year? The first chart is my favourite chart of asset m