European insurers' peak valuations are hard to justify, Exane says

Tryg A/S

02/06/2025 13:05

** BNP Paribas Exane says the possibly peaked valuations in the European insurance sector can be difficult to justify

** European insurers have outperformed the broader market by more than 10% YTD, with price-to-earnings ratios trading close to 10-year highs, the brokerage says

** Property and casualty margins have increased in the past decade and have reached their maximums based on pricing indicators and management commentary, it adds

** Exane prefers stocks with potential "self-help" levers and those better prepared for a softer cycle, such as Hiscox HSX.L which recently announced a cost reduction plan

** It downgrades Swiss Re SRENH.S, which it says has closed its discount to peers despite lower earnings and balance sheet buffers, to "underperform" from "neutral"

** It cuts Tryg TRYG.CO and Swiss Life SLHN.S to "neutral" from "outperform" as it views them as overvalued in light of muted prospects

 (Reporting by Simon Ferdinand Eibach)

 ((Simonferdinand.eibach@thomsonreuters.com))