Berenberg, the German private bank and investment firm, met with 20 US investors last week to present insights on the insurance and reinsurance sectors, with the discussions primarily addressing market outlook, company performance, and sector valuation.
There was particular interest in Munich Re and Hannover Re, which benefit from strong reserving practices that support consistent earnings.
For Munich Re, investors also noted expectations for continued capital management and potential updates at the company’s December Capital Markets Day.
Earnings quality was a central theme, with investors favoring companies with a proven record of sustained EPS and DPS growth. Among composite insurers, Allianz and AXA were highlighted, while NN Group and ASR drew attention in life insurance.
Investors were receptive to Berenberg’s view that Phoenix and M&G have the potential to raise dividend growth toward 5% annually, while Generali remained under discussion despite ongoing governance considerations.
Valuation considerations were also addressed. As sector P/E ratios approach 11x, value-oriented investors have scaled back positions compared with earlier years when P/E ratios averaged 7–8x.
Berenberg noted that investors are attentive to insurers’ dividend strategies, robust solvency levels (averaging 220%), and disciplined underwriting, which could support modest increases in P/E multiples toward 12–13x.
Specialty insurance drew attention, with Beazley emerging as the most frequently discussed non-life insurer due to its exposure to cyber insurance. Investors recognised the company’s strong underwriting profitability, supported by risk prevention measures, as a differentiating factor and a source of competitive combined ratios.
Finally, investors discussed potential benefits from consolidation in European markets, including the UK, Italy, Switzerland, and the Netherlands. Companies such as Conduit Re, Ageas, SCOR, Sabre, and Coface were cited as potential participants in ongoing sector consolidation.
Investors also noted opportunities for Japanese insurers to redeploy capital from crossholdings into M&A activity among UK life and London market insurers.
Overall, Berenberg observed that US investors continue to show strong interest in the insurance sector, with a focus on earnings growth and strategic potential rather than pure valuation.
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