Live Markets: Insurance: rotation on the horizon?
03/12/2025 11:23
Adds new blog entry STOXX 600 up 0.2% Inditex jumps after results, lifts retail sector U.S. ADP payrolls report due Wall St futures edge higher Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com INSURANCE: ROTATION ON THE HORIZON? European insurance .SXIP has enjoyed a strong run in 2025, with valuations hitting record highs, but investors are now pondering whether the rally can extend into next year. BofA Global Research cautions that a turn in the pricing cycle could cap gains in 2026. Yet that does not mean investors should turn outright bearish. "We should not catastrophise – the sector deserves to have re-rated, and there are still opportunities to be found," analysts at the U.S. bank say in a note this week. Property & Casualty names may become a trading sector, rather than buy-and-hold, as pricing softens after a benign hurricane season, while Life insurers could stage a comeback after a decade out of favour. "A normal yield curve and wider credit spreads are a profitable environment for Life insurers. Further, positioning is light...," they add. Balance sheets remain strong, supporting healthy dividends and buybacks, and M&A could also emerge as a theme, they say. BofA has buy ratings on half the sector's market cap, with Prudential PRU.L and AXA AXAF.PA its top picks. (Danilo Masoni) ***** EARLIER ON LIVE MARKETS: EUROPE'S BUDGET HEADACHES CLICK HERE RETAIL LIFTS STOXX 600 AFTER INDITEX RESULTS CLICK HERE EUROPE BEFORE THE BELL: MODEST GAINS CLICK HERE RISK-ON, RISK-OFF, RISK-ON CLICK HERE