Berenberg bullish on insurers over ESG, undervaluation, dividends

Linea Directa Aseguradora SA Compania de Seguros y Reaseguros

24/06/2021 09:06

** Berenberg is bullish on insurers, citing increasing
compliance with environmental, social and governance (ESG)
criteria, undervaluation and "compelling" dividend distribution
    ** Insurers have become more aligned with ESG criteria, the
analyst says, flagging however "there is still room for
improvement"
    ** It adds that the sector is still undervalued despite a
year-to-date 13% rise in the European insurance index  .SXIP  
    ** Berenberg rises its medium-term estimates for dividend
yield, highlighting potential additional improvement from higher
interest rates
    ** It believes though the biggest risk for insurers is
growth, as "investors want more dividends and buybacks from
insurers, more than just earnings"
    ** Berenberg starts four out of seven stocks with "buy":
Coface  COFA.PA  on potential future takeover offer from
shareholder Arch, Conduit Holdings Ltd  CRE.L  on its leverage
to the reinsurance cycle, Linea Directa  LDA.MC  on growth and
margins in Spain and Talanx  TLXGn.DE  as its core primary
insurance business is implicitly valued at close to zero
    ** The broker also starts Beazley  BEZG.L , Helvetia Holding
 HELN.S  and Phoenix Group Holding  PHNX.L  with "hold"
    

 (Reporting by Olivier Cherfan)
 ((olivier.cherfan@tr.com))