At Wall Street the company is thus worth 16The good news is that things have changedIn return the climate equipment has been particularly carefulIt falls well it belongs to first cousinsLocal communities should be better managedHe however praised the British approach It is to receive the family adds the headYou are a lawyer in the development of ChinaThey can opt for a lump sum exemption equal to 30 of their remunerationTake the example of a disfigured Web siteAnd four! European insurance has been through a fourth year in a row of increase in the stock market. Index compiling the main values of the sector, the DJ Stoxx Insurance, won 17, 18 in 2006. It is less although in 2005 (30) but better than in 2003 ( 10) and in 2004 ( 8). It is especially much better than the two "annus horribilis" 2001 ( 30) and 2002 ( 51).
But the crisis which affected the business of insurance four years ago is not completely erased memories. "Investors have kept some trauma of this period, confirms Pierre Flabbée, at Kepler Equities." It is telling to see insurance often progresses in the stock market in the last months of the year, once the bulk of the results is done.
Between January and June 2006, the performance of the sector was almost zero. "Air hole" amputated the stock market capitalization of the major players of more than 15 in May. "The market was afraid when the rise of interest rates accelerated, which is never very favourable to the sector", remembers Pierre Flabbée.
A lenient loss experience
Then the trend has reversed. Publication of half year results was the opportunity of a real fireworks for European insurers, who continue to benefit from relief measures for five years, a relatively lenient loss experience and the good market shares. The increase in the sector began in August. It marked a short break in November left again at the end of the year.
Today, the recovery of the sector remains reasonable, according to analysts. On average, European insurers will pay 11 times the results expected in 2007 and 1.5 times their "embedded value" or intrinsic value. "It surprises me that the sector is so badly valued while fundamental techniques have rarely been as healthy and prospects do not allow to anticipate sharp deterioration of the environment, particularly in terms of changes in rates, is, for its part, Hugues Doumenc, at Fideuram Wargny." Maybe is it the rule currently given to the defensive values, fears that the Solvency II reform reduce the profitability of own funds or the likelihood that insurers overpay their acquisitions
After several relatively quiet years, 2006 indeed marked the return of the mergers and acquisitions in the insurance. Allianz has fulfilled the resumption of the Italian RAS, Swiss Re of GE Insurance Solutions. Above all, AXA boosted the large manoeuvres by putting his hand on the Winterthur Switzerland. Shortly after, Generali replied by buying his compatriot Toro, SCOR was Revios while Aviva gained of Ameru a few months after having been spurned by Prudential.
"Possible overcapitalization.
These operations have been variously appreciated by investors. They found that they sometimes lacked real strategic interest. Very clearly, they are now more sensitive to what insurers intelligently use their surpluses of capital. They should be important in the future.
According to Citigroup analysts, 94 billion euros of net aggregate should identify the European insurers this year and the following, EUR 33 billion would be a surplus of capital after financing internal growth (for 23 billion euros) and the payment of dividends (38 billion).
Many actors will have to make a choice between acquisition strategy and compensation for the shareholders. "There are a lot of thoughts currently on a possible overcapitalization of the sector, indeed rife Danny Jacques, at Raymond James." This could generate new external growth operations or cause some major players to buy back their own shares, as Munich Re or Italian Generali. "Answer in the coming months.
