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FEATURE: The insurance stocks to watch
10 February 2010
Fierce pricing competition is prompting investors to choose their stocks carefully this year. We reveal which stocks equity analysts are tipping to outperform.
Investors’ hopes of economic recovery and a quiet year for natural catastrophe losses last year sent property/casualty insurance and reinsurance stocks higher. The market’s most troubled companies in 2008 had shares that doubled, tripled, or even quadrupled their prices during the last year.
All but those firms hardest hit by the economic downturn of 2008 were able to post impressive financial results in 2009. Most insurers and reinsurers that posted full-year losses in 2008 recorded profits in 2009, shareholders funds were replenished and book values increased.
However, enthusiasm among investors towards property/casualty insurance and reinsurance stocks for 2010 is muted. Last year’s benign conditions helped insurance stocks post a marked improvement on 2008. But despite such promising conditions, insurance and reinsurance stocks failed to outperform benchmarks such as the Standard & Poor’s 500.
According to data from rating agency AM Best, shares in its Global Non-Life...
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