Barclays starts Beazley at 'overweight'

Barclays initiated coverage of Beazley at ‘overweight’ on Tuesday with a 391p price target, arguing that it’s "a rare example of a growth play in insurance".

The bank said Beazley should benefit from both the cyclical upswing in the market created by price hardening and resilient organic demand in specialty segments such as cyber.

It expects the insurer to grow its top line by 25% in the next three years and improve its combined ratio to 91.5% in 2022.

"While $340m of Covid losses have nullified the $300m May equity raise and reduced the capital buffer, we believe the company could weather a further $300m of losses before needing to strengthen its capital," it said.

"In the meantime, the stock is trading at 10x price-to-earnings 2021E, 8x 2022E, well below the historical average of 15x over the past five years."