JPMorgan says Lloyd's insurers 'on cusp of a golden era', upgrades Hiscox

The bank upped Hiscox to ‘neutral’ from ‘underweight’ as it believes the retail issues that have dogged results in recent years are likely to be behind the company and an improving reinsurance market should allow it to retain more business in this segment. The target price for Hiscox was lifted to 1,200p from 930p.

JPM’s favourite names in the space remain ‘overweight’ rated Beazley and Lancashire. The bank placed Beazley on ‘positive catalyst watch’ heading into full-year results in March.

Looking ahead to this year and beyond, JPM expects the three Lloyd’s insurers to produce the strongest return on equity since the mid-2000s with its average ROE for 2023/24E at 24%/21%%.

"At this stage in the cycle, with all three names set to deliver, we believe the Lloyd’s insurers are on the cusp of a new golden era similar to the one that we saw in 2012-15," it said, noting that its pre-tax profit estimates are 21%/13% ahead of Bloomberg consensus for 2023/24.

At 1035 GMT, Hiscox shares were up 1.3% at 1,136.75p.