UBS on U.S. Insurance/Non Life: Reducing EPS Estimates on 2Q U.S. Storms
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Up: 8 | Down: 5 | New: 26
Rating Summary:
9 Buy, 11 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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UBS on U.S. Insurance/Non Life: Reducing EPS Estimates on 2Q U.S. Storms
UBS analyst, Brian Meredith, said, "Reflecting pre-announcements and our estimates for 2Q11 U.S. storm losses, we are reducing our 2Q11 and 2011 EPS estimates for Axis Capital (NYSE: AXS), Aspen Insurance (NYSE: AHL), Arch Capital (Nasdaq: ACGL), Everest Re Group (NYSE: RE), RenaissanceRe Holdings (NYSE: RNR) and Validus Holdings (NYSE: VR). For the same reason, in recent weeks, we also cut our EPS estimates for ACE Ltd (NYSE: ACE), Allstate (NYSE: ALL), Chubb (NYSE: CB), PartnerRe Ltd (NYSE: PRE),Travelers (NYSE: TRV), W.R. Berkley (NYSE: WRB) and XL Capital (NYSE: XL). We estimated losses for AXS, ACGL, RE and RNR using ceded reinsurance information from some of the regional insurance companies most impacted by the tornadoes."
"Highest-ever U.S. 2Q insured catastrophe losses - The severe weather that occurred in 2Q11 is estimated to have resulted in close to $15bn of insured catastrophe losses in the U.S. As shown in Table 2, 2Q U.S. storm loss preannouncements to date total $7.2bn-$7.6bn with after-tax losses equating to 2.0% of equity, on average. The largest disclosed insured loss estimates from the storms are State Farm at greater than $2 billion and Allstate at $2 billion (6.8% of equity)."
"Top stock recommendations: VR, AON and RE - VR is among the best positioned reinsurers to take advantage of improved property reinsurance pricing and is trading below book value. We continue to like the fundamentals of insurance brokers, with Aon Corp. (NYSE: AON) the cheapest on cash earnings."
UBS analyst, Brian Meredith, said, "Reflecting pre-announcements and our estimates for 2Q11 U.S. storm losses, we are reducing our 2Q11 and 2011 EPS estimates for Axis Capital (NYSE: AXS), Aspen Insurance (NYSE: AHL), Arch Capital (Nasdaq: ACGL), Everest Re Group (NYSE: RE), RenaissanceRe Holdings (NYSE: RNR) and Validus Holdings (NYSE: VR). For the same reason, in recent weeks, we also cut our EPS estimates for ACE Ltd (NYSE: ACE), Allstate (NYSE: ALL), Chubb (NYSE: CB), PartnerRe Ltd (NYSE: PRE),Travelers (NYSE: TRV), W.R. Berkley (NYSE: WRB) and XL Capital (NYSE: XL). We estimated losses for AXS, ACGL, RE and RNR using ceded reinsurance information from some of the regional insurance companies most impacted by the tornadoes."
"Highest-ever U.S. 2Q insured catastrophe losses - The severe weather that occurred in 2Q11 is estimated to have resulted in close to $15bn of insured catastrophe losses in the U.S. As shown in Table 2, 2Q U.S. storm loss preannouncements to date total $7.2bn-$7.6bn with after-tax losses equating to 2.0% of equity, on average. The largest disclosed insured loss estimates from the storms are State Farm at greater than $2 billion and Allstate at $2 billion (6.8% of equity)."
"Top stock recommendations: VR, AON and RE - VR is among the best positioned reinsurers to take advantage of improved property reinsurance pricing and is trading below book value. We continue to like the fundamentals of insurance brokers, with Aon Corp. (NYSE: AON) the cheapest on cash earnings."
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