While the market expects a strong pricing response from the domestic general insurers, UBS assesses March quarter APRA data doesn’t support this view.
The analyst explains overall profitability was poor, East Coast floods impacted margins and fixed income losses were incurred during the quarter.
Among the domestic insurers, the broker continues to prefer Buy-rated Suncorp Group over Insurance Australia Group ((IAG)). The $14.40 target price is retained for the former.
Sector: Insurance.
Target price is $14.40.Current Price is $12.13. Difference: $2.27 – (brackets indicate current price is over target). If SUN meets the UBS target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
