Oddo still upbeat about EU insurance, sees risk premium as 'excessive'

Grupo Catalana Occidente SA

06/10/2023 10:38

** Oddo says it remains positive on European insurance
sector, saying it offers good visibility on earnings growth and
prospects of attractive returns of capitals
    ** It says the market assigns "excessive" risk premium on
the stocks amid fears of inflation impact, risk of large-scale
life insurance surrenders and real estate exposure, pointing to
the companies' financial strength 
        ** "The impact of these different risks has been
overestimated by the market in our view," it says
    ** It notes better-than-expected H1 results on average for
the sector with a very good performance in property and casualty
(P&C), noting the improvement on solvency margins, at 223% on
average at the end of June 2023 vs  221% at the end of 2022
    ** Its top picks among large caps are France's AXA
 AXAF.PA , Germany's Allianz  ALVG.DE  and Swiss Re  SRENH.S ,
as well as ASR  ASRNL.AS  and GCO  GCO.MC  among mid caps, all
rated "overweight"
    ** It cuts Germany's Hannover Re  HNRGn.DE  and Talanx
 TLXGn.DE  to "underweight" from "neutral", given the relative
upside offered by the different stocks under its coverage
    ** Oddo cuts British insurer  Phoenix Group  PHNX.L , citing
negative impact from switching to the new IFRS 17 standards, a
more difficult economic and financial environment in the UK and
lack of drivers

 (Reporting by Tristan Veyet)
 ((Tristan.chabba@thomsonreuters.com))