Amlin defies market view
AMLIN hit a new five-year high this week, despite comments from KBC Peel Hunt describing the Lloyd's insurer as "an accident waiting to happen".
In its 35-page review of the syndicates, the stockbroker recommended a sale of stock, saying: "High gearing is fine on the way up. We know the sequel - sell". Amlin was trading at 185p as Insurance Times went to press.
Clients were also advised to sell out of Hiscox, at 170p a share, as "reserving has been suspect". Highway, trading at 43p, and Wellington, at a three-year high of 106p, were also on the sell list.
Beazley, Chaucer, Brit and Goshawk were rated a hold, while Kiln was well tipped as a buy.
KBC's favourite insurer though was Atrium, "by far the most attractive stock, in-built growth. A likely lad, with reality of never having enough capital." Shares are at a year high of 209p.
KBC also predicted further consolidation in the sector, citing the stage of the cycle where "growth is impossible for nearly all without acquisition".
Meanwhile, Aim-quoted Broker Network unveiled its full-year results on Tuesday, also announcing the acquisition of two general insurance brokers in Lincolnshire, which will be merged. Shares are trading at around 111p.
' Yvette Essen is stock market reporter and insurance correspondent for The Daily Telegraph