Time to buy Aviva and other bargain European insurers says JP Morgan


Should we be buying shares in European insurers? One Wall Street bank thinks so.

There are still a bunch of reasons to buy share in Europe’s big insurers, which remain in bargain basement territory.

That at least is the opinion of the financials team at JP Morgan, which pointed out the sector trades at 35% discount to EU markets.

And this is after 84% of companies tracked by the American bank delivered better than expected first half earnings.

JPM also pointed out that the EPS momentum will likely continue into the second half, while the brimming coffers of insurers means that special dividends and buybacks are on the menu.

At the same time the general pricing in the sector (the ability to get prices rises through) will likely to be supportive of those operating in the industry.

“We remain optimistic about the performance of the insurance sector into yearend, which has been observed since mid-year and is largely driven by a better-than-expected [first-half] results season,” JPM said in a note to clients.

In the UK, its top picks are Aviva PLC (LSE:AV.) (LON:AV.) and Beazley Plc (LON:BEZ), which are both rated ‘overweight’ by the bank.


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