An equity report by S&P Capital IQ has found that the European insurance sector is ‘well placed to perform in 2012’.
The report splits insurers into two categories – Nomads and Farmers.
The Nomads – Prudential, Generali and Zurich – are the life insurers who are most visibly generating a level of new business profit that should provide growth, according to the report.
These can be contrasted with the Farmers - Axa, Aegon, Allianz, Legal and General and Standard Life – who the report says may have seen growth in new business within existing products but are heavily dependent on farming legacy products or markets to support current levels of life IFRS profits.
Therefore they would struggle, in the absence of a significant uplift in new business profits, to report a progressive life IFRS profit profile over time, according to the report. The report’s recommendation for the sector as a whole is that it is ‘overweight’.