JP Morgan reiterates 'overweight' on Beazley and Hiscox

(Sharecast News) - Analysts at JP Morgan reiterated their 'overweight' stance for shares of Beazley and Hiscox, telling clients that the outlook for all three Lloyd's insurers, which also includes Lancashire Holdings, was better than previously guided towards.
That, they argued, should drive a resumption of dividend payouts.

"Looking ahead, we believe that the outlook on growth and pricing momentum are the key re-rating drivers for the sub-sector, which are both tracking well, followed by resumption of dividends at full year results. Within the Lloyd's sub-sector, we prefer Beazley (OW) and Hiscox (OW)."

The positive momentum seen at the insurers over the first half of the year was expected to extend into the back half of 2021, on top of the ongoing growth in premiums.

Indeed, the insurers had suggested that pricing improvements might stretch into 2022 - a key positive for the sub-sector.

In the case of Hiscox specifically, JP Morgan believed the recovery might prove faster, allowing its Retail unit to hit its combined operating ratio target a year earlier.

JP Morgan also lifted its target price for Hiscox from 1,016.0p to 1,155.0p and that for 'neutral' rated Lancashire Holdings from 613.0p to 662.0p.