HSBC upgrades AIG, Chubb on their ability to navigate macro uncertainties

Investing.com -- HSBC upgraded insurance company’s American International Group (NYSE: AIG) and Chubb (NYSE: CB) Ltd to "Buy" from "Hold" given their strong risk management, solid capital positions, and ability to navigate macroeconomic uncertainty.

The bank said the property and casualty insurance sector’s defensive nature makes it attractive in volatile markets.

HSBC raised its price target on AIG to $93 from $80, implying a 13% upside, noting management’s progress in streamlining operations through asset sales and corporate restructuring.

With these efforts nearing completion, the firm now has a clearer path to focus on core business growth, improving cost efficiency, and executing share buybacks.

“We think management has achieved a lot in a relatively short time, from the sale of Validus Re, Crop Risk Services and lately the travel business to the Corebridge deconsolidation and the sale of a large block of Corebridge stake to Nippon Life,” analyst said on AIG.

For Chubb, HSBC lifted its price target to $323 from $298, seeing strength in its underwriting discipline, expansion in mid-market and international segments, and potential for opportunistic M&A.

The insurer's best-in-class combined ratio and excess capital position support its long-term growth outlook.

While both stocks had underperformed the S&P 500 before recent gains, HSBC believes their fundamentals and market positioning now present attractive investment opportunities.

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