Investor interest peaks in reinsurance and AXA during North American marketing blitz: Berenberg

During a week of extensive marketing efforts across the United States and Canada, financial investors have shown significant interest in two key subjects: reinsurance and AXA, according to a Berenberg report.

Over the course of 23 investor meetings, these topics emerged as primary focuses, with discussions revolving around the sustainability of pricing in reinsurance and the implications for primary insurers, as well as the potential for cash remittances to drive dividend growth and buybacks for composite insurers.

The investor sentiment reflects a growing concern about what could potentially derail the current momentum in reinsurance pricing and the transfer of frequency losses back to primary insurers.

This is particularly pertinent for companies such as Munich Re and Hannover Re in the reinsurance sector, and AXA as well as Allianz in the composite insurance sector.

The majority of discussions were held with well-informed generalist investors, who have the flexibility to allocate investments across various sectors and geographies.

The continued appeal of European reinsurance and composite insurers stems from the belief among investors that the share price momentum observed since October 2023 will persist.

The meetings yielded several key insights: Investors widely agreed on the insurance sector’s promise for substantial dividend growth and buyback potential.

There was a notable uptick in interest towards reinsurance dynamics, particularly regarding the sustainability of the ongoing hard market cycle.

Although asset risk was less prominent, discussions lingered on exposures, particularly concerning investments in US offices.

Moreover, there was a clear trend towards seeking new investment opportunities, indicating either a diversification strategy or a desire to strengthen exposure to the insurance sector within investment portfolios.

As discussions around dividend growth and buybacks continue to dominate, investors are keenly observing potential catalysts that could further propel share prices upward.

While these catalysts are widely recognised and primarily centered on increased cash returns to shareholders, investors remain optimistic about the potential for additional upside.

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