JLT finds market favour

Numis began last week with a reduce recommendation on insurer Jardine Lloyd Thompson (JLT).

The stockbroker raised the price target for JLT by 45p to 345p and wrote in a note to clients that the "change reflects a less pessimistic stance on the earnings outlook for 2007-09, based on evidence of material new business wins in the first half of this year and the suggestion of future efficiency gains."

However, Numis added that "revenue erosion from softening rates is likely to frustrate JLT for a number of years yet".

In the previous week, JLT investors had shrugged off sharply lower first-half profits at the insurer. JLT blamed a 25% fall in pre-tax profits on the weak dollar and a "soft" insurance market, but shares in the company responded by climbing 7%. It is currently trading at 405p.

Meanwhile Chaucer continues to drift lower, its price having fallen by over 20% since Amlin pulled out of takeover talks in July. Shares are now at a pre-takeover talk level of 56p.

Aviva also continued to retrace from recent highs of 663p, as investors digested news that former KPMG chief Lord Sharman was tipped to succeed long-standing chairman Pehr Gyllenhammar. Shares are currently worth 636p.

Royal & SunAlliance (R&SA) continued its bull run last week on the back of another strong performance from the FTSE 100. Investors may also be relieved at R&SA's dismissal of a report claiming that General Motors is seeking well over $1bn (£568m) in damages over asbestos-related claims. As Insurance Times went to press, shares were trading at 91p.