Credit Suisse takes a look at Lloyd's of London insurers

The bank started coverage of Beazley at 'outperform' with a 565p price target, saying it likes the company's exposure to US cyber insurance and reckons it is well placed to take advantage of growth in European cyber insurance in light of legislative changes.

"Among the Lloyd's insurers we prefer Beazley not only due to its attractive profitability but also because of its unique opportunity to continue growing its specialty portfolio which is less impacted by underwriting margin erosion in the current property & casualty cycle.

"While the shares do not look particularly attractive versus the wider European insurance market, we think that Beazley has the characteristics of an attractive compounder stock."

It initiated coverage of Lancashire with an 'underperform' rating and 610p price target, saying the valuation looks demanding. The bank said that while it expects Lancashire to continue to pay attractive special dividends, it is materially below consensus expectations on earnings.

Meanwhile, CS downgraded Hiscox to 'neutral' from 'outperform' following a strong share price performance, but lifted the price target to 1,305p from 1,180p. "We continue to find the company's business model highly attractive and recognise the continuous delivery on targets but think that current valuation adequately reflects these characteristics."

At 0950 BST, Beazley shares were up 0.3% to 508p, Lancashire was down 1.1% to 722.50p and Hiscox was up 0.1% to 1,365p.