BofA sees recovery for Spanish insurers in 2024, upgrades Mapfre

Linea Directa Aseguradora SA Compania de Seguros y Reaseguros

25/03/2024 13:22

** BofA Global Research expects 2024 to be the year of
recovery for Spanish insurers, saying the market shows
"excellent opportunities" in the Personal lines P&C space
    ** The broker says European P&C (property and casualty)
markets suffered from the same post-COVID trends, though to
varying degrees, adding that while normalisation should come
soon for the Nordics and the United Kingdom, Spain "has lots of
room to catch up" on margins 
    ** The broker upgrades Mapfre  MAP.MC  to "buy" from
"neutral", saying the Spanish insurer is best positioned with
attractive valuation and upside potential to consensus earnings 
    ** "We see earnings growing 10% a year on average over the
next three years" - BofA
    ** The broker sees recovery in most of Mapfre's P&C units
from 2024 as well as a doubling of profits in the next two years
in Spain with "fairly conservative" assumptions
    ** The U.S. and Latin America are also set to benefit from
higher pricing and portfolio restructuring, helping offset some
normalisation of extraordinarily high margins in Brazil, BofA
flags
    ** It keeps "underperform" on Linea Directa  LDA.MC , saying
recovery is more expected and premium valuation multiple remains
challenged

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