JPM names insurance top picks with focus on capital returns

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22/09/2023 09:16

** In a note on European insurers, J.P.Morgan says it
favours firms with high capital returns, potential for a
positive surprise in reinsurance, and restructuring/re-rating
stocks
    ** The broker's top picks are Aviva  AV.L , AXA  AXAF.PA ,
Beazley  BEZG.L , Hannover Re  HNRGn.DE , Munich Re  MUVGn.DE 
and NN  NN.AS  (all "overweight")
    ** It raises Allianz  ALVG.DE  to "overweight" from
"neutral", saying the company continues to deliver towards the
top end of its guidance range despite difficulties in personal
lines P&C and from volatile fixed income yields
    ** JPM says the market underappreciates the sector's strong
capital return potential
    ** Notwithstanding the rise in risk-free yields, the sector
offers enticing capital return yield premium, particularly for
UK life and Benelux names, it adds
    ** The broker says that despite a tough economic backdrop,
the sector has several growth and pricing stories; reinsurance
is its most preferred sub-sector with pricing at 20-year highs
    ** In life insurance, the broker sees recovery in certain
key markets, including UK bulk annuities, pensions and savings
products, as higher yields support contractual service margin
growth and investment returns

 (Reporting by Mateusz Dobrzyniewski)
 ((Mateusz.dobrzyniewski@thomsonreuters.com))