Insurance fantasy share dealing

What better way to mix business and pleasure than by having a fantasy flutter on insurance shares?

Expert selections
To get an insight into what shares the experts would put in their portfolios, we asked four top insurance experts to spend £1,000 on shares. Their selections are shown at right.

We will monitor their progress over the course of the year and, at the end of the year, the analyst whose shares are worth the most will win a magnum of champagne.

Readers dealings

Now here's an opportunity to beat the experts at their own game. You have a fantasy £1,000 which you can invest in any company (or companies) with a significant interest in general insurance having its shares listed on the London Stock Exchange. You can invest in up to three companies. At the end of this year the reader whose shares are worth the most will win a magnum of champagne. And remember the insider dealing rules apply.

Regular readers of Insurance Times Stockwatch column may already have their own ideas of which listed shares to tip, but some of the names to conjure with are: Atrium Underwriting, Cox, Culver, CGNU, Kiln, Ockham, Royal & SunAlliance.

How to enter
To enter just fax your selections to us here at Insurance Times on 020 7618 3499 by Wednesday 9 January 2002. We will take the share prices at close of trading on that day as the start point for the game.

Share allocations will then be made for each reader up to the £1,000 limit. Any surpluses which cannot purchase whole numbers of shares will be discarded. The competition will end at close of trading on 11 December 2002.

In the event of a tie the editor will draw a winner at random. The editor's decision is final. No employees of Southern Magazines or associated companies are allowed to enter.

Chris Rathbone | Williams de Broë
His choice:
1) Royal & SunAlliance, 83 shares
2) Kiln, 589 shares
3) Brit Insurance Holdings,476 shares

"Royal & SunAlliance has to be the only share in town in respect of the main general insurance upturn, rather than the esoteric nature of Lloyd's, which can be either boom or bust. By comparison, I tend to regard CGNU as a life insurer with a large general insurance interest.

"Kiln is a nice little company and it's gradually reinventing itself. It had a reputation for being a little bit staid but [managing director] Ed Creasy and [finance director] Roy Butler are doing well there. I'm looking at it in value terms and it looks like a good buy.

"British Insurance Holdings is also an interesting company. It has not only the Lloyd's interest but it also has some reasonable operations on the reinsurance side. If you believe this upturn will be led by reinsurance, you've got to have a go."

David Wharrier | Fitch Ratings
His choice:
1) CGNU, 48 shares
2) Wellington Underwriting, 268 shares
3) Royal & SunAlliance, 75 shares

"CGNU impresses me with its strategy in the life market and its link with bancassurance - it is going into a number of joint ventures with banks with a view to distributing its products to a wider customer base.

"Wellington I think of as one of the better performing Lloyd's operations. I expect it to do well following the World Trade Centre tragedy and I'm interested in its proposal to set up a new UK insurance company to run alongside its Lloyd's operation. It'll give it diversification with two operations, which should be interesting.

"Royal & SunAlliance's business continues to improve and it is targeting a combined ratio of 103. It is focusing more on the non-life side, which should bear fruit with an increase in rates in the coming 12 months."

Michael Deeny | Assoc. Lloyd's Members
His choice:
1) Atrium, 421 shares
2) Kiln, 619 shares
3) AIG, 5 shares

"I choose Atrium because Christine Dandridge is the best underwriter at Lloyd's. She's the underwriter of one of its two main syndicates. Her syndicate, 609, and its other main syndicate, 570, are very well placed to benefit substantially from the dramatic increases in rates that we're seeing now.

"Kiln has consistently been the best regarded managing agency at Lloyd's and it can do very well in 2002. Its syndicate 557 is particularly well placed to make large profits because of the book of business it writes - in non-marine excessive loss, where we are seeing massive increases in rates.

"AIG is the best-run insurance company in the world and I think it's perfectly placed to profit from the huge increases in insurance rates in the US."

James Quin | HSBC
His choice:
1) CGNU, 40 shares
2) Kiln, 588 shares
3) Amlin, 354 shares

"CGNU is one of the few companies with a clear cut strategy. When you compare it to the European companies, it's tangible, not too ambitious, but realistic.It's also got a good balance sheet. The general insurers should start to shine and should be churning out good profits next year.

"I bracket Kiln and Amlin together as corporate Lloyd's vehicles. Fundamentally they both look pretty interesting at current share prices and both should start to do quite well in the next couple of years with the cycle as it is at the moment."