London Market rehab did the trick: underwriting margins at decade high

Remediation and portfolio rebuilding at London Market insurers may have done the trick, with key listed players now writing business "at the best underwriting margins in over a decade," a key equity market brokerage has told investment clients, confirming ‘Buy’ recommendation on two of three listed players.

"London Market updates impressed, with strong top-line growth and relatively benign large losses," analysts at Bank of America said in research to markets following Q2 earnings reports.

"Multiple years of discipline and rate increases [are] now paying off."

Beazley, Hiscox and Lancashire are considered "well-placed" to manage the upsurge in inflation, but "worse than expected claims inflation" does take high billing on the list of lingering downside risks.

Elsewhere on the worry list for investors, BofA lists slower than promised growth in Hiscox's retail DPD business. Any sooner than expected shift in the pricing cycle could also undercut the lot.

Bank of America analysts currently say 'Buy' for shares of Beazley and Hiscox.

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