Insurance & Reinsurance

Insurance & Reinsurance equity research

Explore the most viewed and latest equity research and media content for companies within the Insurance & Reinsurance sector. Stocks in this sector provide insurance and broker services within life insurance, full line, and reinsurance.

Insurance & Reinsurance equity research

13 Mar 19

Stronger earnings before demerger

Prudential announced operating profit of £4,827m (up 6% lfl) and net profit at £3,013m (up 30% lfl). Like other UK Life insurers, Prudential benefited from new longevity assumption changes (£441m). The Asian business was the major contributor to earnings (c. 38%) as the US operations were hit by equity market movements. The demerger process is progressing well. The insurer announced African acquisitions in Cameroon, Ivory Coast and Togo, but we do not expect a significant impact on the group’s figures.

Companies: Prudential

12 Dec 18

Fattening the goose

We reiterate Buy on Helios and, following a transfer of coverage, present new forecasts and set a 12-month forward target price of 175p (previously 160p). This together with an estimated 3.9% dividend yield implies 67% TSR potential. Following a significant year of acquisitions, we estimate 32% growth YoY in the capacity portfolio in 2018, underpinning +25% in adjusted NAV. Trading at 0.5x adjusted NAV at end-2018E, we see considerable share price upside, with the current valuation not reflecting the recent acquisitions Helios has announced.

Companies: Helios Underwriting

06 Mar 19

Better earnings, in part thanks to life expectancy changes

L&G reported FY18 operating profit from divisions of £2,231m, 1% above estimates. All business lines posted an improvement in profitability, mainly L&G Retirement which recorded a 21.8% increase in its operating earnings to £1,115m. AuM crossed the threshold of £1tn. Net profit reached £1,827m, -3% yoy, as the prior year recorded a one-off US tax benefit of £246m, and perfectly in line with estimates. The proposed final dividend is 11.82p. We keep our positive opinion on the company.

Companies: Legal & General Group

07 Mar 19

New management, same issues

Aviva posted record cash remittances at £3.2bn, but without reaching the £8bn targeted for 2016-18. The capital position remained solid with a Solvency II ratio at 204%. The Board decided to distribute a final dividend of 20.75p/share, bringing the dividend for the whole year to 30p. The IFRS profit after tax, up 2% to £1,687m, was better than expected, with a significant release of longevity provisions (£728m). The new management will continue to focus on debt reduction (£1.5bn) thanks mainly to internal sources.

Companies: Aviva

Latest Content

Talanx

Profit in line with (corrected) FY2018 target

Net attributable profit increased by 5% to €703m for FY2018 compared to FY2017. Net premiums earned rose by 8% to €29.6bn for 2018 compared to 2017. The net investment income was down by 16% to €3.8bn for 2018. RoI was 3.3% for 2018 compared to 4.0% for 2017. Insurance claims increased by 1% to €23.5bn in 2018 compared to 2017. The group’s net combined ratio of the non-life business was 98.2% for 2018 compared to 100.4% for 2017. Pre-tax result rose by 12% to €1.86bn for 2018. Equity capital attributable to common shares decreased by 1% to €8.5bn at the end 2018 compared to the end of 2017. RoE was 8.0% for 2018 versus 7.5% for 2017. The dividend per share proposal increased from €1.40 for FY2017 to €1.45 for FY2018. Talanx confirmed its net attributable profit target of around €900m for FY2019.

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18 Mar 19
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Assicurazioni Generali

In good shape

A new positive year for Generali. Operating earnings increased by 3% to €4,857m with a growing contribution from all business segments and markets. In the Life business, the operating result grew 2.8% to €3,067m, thanks to sustained inflows (€11.4bn). The P&C business benefited from a controlled combined ratio (93%) and operating profit reached €1,992m, up 2.5% yoy. Net profit was €2,309m, up 9% yoy, and the proposed dividend/share is €0.90. We keep our positive opinion on the company.

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14 Mar 19
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Prudential

Stronger earnings before demerger

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13 Mar 19
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Baloise Holding

Mixed FY2018 figures, higher dividend proposal

Preliminary net attributable profit decreased by 5% to CHF523m for FY2018 compared to FY2017. Net premiums earned were flat at CHF6.53bn for 2018 compared to 2017. Investment income declined by 1% to CHF1.38bn for 2018 compared to 2017. Realised gains and losses on investments dropped from a profit of CHF1.12bn for 2017 to a loss of CHF992m for 2018, of which a loss CHF1.09m for 2018 belonged to “Realised gains and losses on investments at the risk of life insurance policyholders and third parties”. The investment yield declined from 2.9% for 2017 to 2.2% for 2018. Overall, total income decreased by 23% to CHF7.28bn for 2018 compared to 2017. Total expenses were down by 25% to CHF6.54bn in the same period. Pre-tax profit rose therefore by 7% to CHF698m for 2018. The tax ratio increased from 18.2% for FY2017 to 25.1% for FY2018. The net combined ratio of the non-life business declined from 92.3% for 2017 to 91.7% for 2018. Equity capital decreased by 6% to CHF6.0bn at the end of 2018 compared to 2017. RoE was 8.5% for FY2018 compared to 8.9% for FY2017. The SST solvency ratio will be published at the end of April 2019 but Baloise said it is above 200%. The dividend per share proposal increased from to CHF5.60 for FY2017 to CHF6.00 for FY2018. The annual report 2018 will be published on 28 March.

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07 Mar 19
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Aviva

New management, same issues

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07 Mar 19
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Helvetia Holding

Good 2018 results despite weak equity market, share split 1 to 5

Pre-tax profit was up by 7% to CHF548m for FY2018 compared to FY2017. Net premiums earned were up by 5% to CHF8.45bn for 2018 compared to 2017. Investment income declined by 3% to CHF987m for 2018. Realised gains and losses on investments were a loss of CHF193m for 2018 compared to a profit of CHF347m for 2017. Total investment result decreased by 41% to CHF794m for 2018. Overall, income decreased by 6% to CHF9.15bn for 2018 compared to 2017. Total expenses were down by 6% to CHF8.6bn in the same period. The net combined ratio of the non-life business was 91.0% for 2018 compared to 91.8% for 2017. Net profit increased by 7% to CHF431m in 2018 compared to 2017. Net profit attributable to shareholders (after interest for preferred securities) rose by 7% to CHF414m in the same period. Total equity decreased by 2.5% to CHF5.1bn at the end of 2018 compared to the end of 2017. RoE after tax was 8.1% for 2018 compared to 7.8% for 2017. Helvetia said that the SST ratio was above 200% and therefore in the target range of 180% to 240% at the end of 2018. The proposed dividend rose from CHF23.00 for FY2017 to CHF24.00 per share for FY2018. Helvetia will also propose a share split with a ratio of 1 to 5. This should take account of the strong price development over recent years as well as the high price level and ensure the share remains accessible to a broad group of investors as an attractive security.

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06 Mar 19
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Legal & General Group

Better earnings, in part thanks to life expectancy changes

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06 Mar 19
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RSA Insurance Group

More time is needed to recover

Higher weather-related costs and large loss challenges in Commercial Lines have driven down RSA’s underlying result (-20% to £492m). Scandinavia remains the largest contributor to the Group’s operating earnings (59%). Net profit stood at £326m, lower than our estimates (£355m). The insurer proposed a final dividend of 13.7p (vs. 14.2p expected by us). The capital position was above the targeted range (130-160%) at 170%. In total, RSA’s figures disappointed and confirmed the difficulties in its home market.

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01 Mar 19
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Swiss Life Holding

Good FY2018 earnings, substantially increased dividend

Preliminary pre-tax profit increased by 6% to CHF1.4bn for 2018 compared to 2017. Net earned premiums were up by 3% to CHF13.2bn for 2018 compared to 2017. The Investment result increased by 21% to CHF4.6bn in 2018. RoI was 3.0% for 2018 compared to 2.5% for 2017. Fee and commission income rose by 10% to CHF1.6bn in 2018. Total income increased by 7% to CHF20.1bn in 2018. Insurance claims were up by 6% to CHF14.0bn for 2018. Total expenses rose by 7% to CHF18.5bn in 2018. The tax ratio came slightly down from 23.3% for FY2017 to 22.8% for FY2018. The net profit attributable to shareholders rose by 7% to CHF1,076m in 2018 compared to 2017. Shareholders’ equity was down by 6% to CHF14.5bn at the end of 2018 compared to the previous year-end. The RoE was 7.2% for 2018 compared to 6.9% for 2017. The (adjusted) RoE was 9.1% for FY2018 compared to 9.3% for FY2017 on a company-adjusted basis. The SST ratio increased from around 170% to above 180% as of 1 January 2019 based on the new regulatory solvency model. Assets under management grew by 9% overall to CHF233bn, of which CHF71.2bn was third-party business (mainly real state AuM). Swiss Life generated net new asset inflows of CHF8.4bn for 2018 compared to CHF7.1bn for 2017 in the third-party business. The dividend proposal rose by 22% from CHF13.50 for FY2017 to CHF16.50 per share for FY2018.

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