Berenberg upgrades Spain's Linea Directa, sees further profitability ahead

Linea Directa Aseguradora SA Compania de Seguros y Reaseguros

30/04/2024 09:36

** Shares of Spanish insurer Linea Directa  LDA.MC  up 1.6%
at EUR 1.026
  
        ** Berenberg raises stock to "buy" from "hold", says
various catalysts are expected to offer a boost during the year
after a period of volatility affecting co's profitability
  
    ** "Investors are taking a long-term view on the group's
profitability" - Berenberg
    ** Brokerage points to customer growth returning in motor
insurance in 2024, combined ratio falling to 90% range in motor
and the restarting of dividends at FY24 results
    ** "Motor improvement faster than expected", says Berenberg,
adding the company achieved better pricing than the market, up
7.3% in 2023, and is still raising prices
    ** Linea Directa swung to a profit of 10.1 mln euros ($10.8
mln) in Q1, and its combined ratio was down to 97.3%
year-on-year
    ** Raising prices and a combined ratio below 100% have set
the company on a road towards recovery, while a return to
policyholder growth, likely in Q3 or Q4, could be the next
catalyst, Berenberg says

($1 = 0.9338 euros)

 (Reporting by Jakub Olesiuk)
 ((jakub.olesiuk@thomsonreuters.com))