The EMEA insurance sector saw its average stock decline by 3.1% over the past month, reversing the previous month’s gain of 3.9%.
Jefferies reports that Prudential, AIA, and Storebrand led the sector with gains of 6%, 3%, and 3% respectively, while Beazley, Sabre, and Legal & General posted declines of 13%, 10%, and 10%. Life insurers outperformed other sub-sectors, followed by Nordic non-life insurers, while specialty re/insurers and reinsurers underperformed.
Over a one-year period, the sector has returned 19.8%, and over five years, it has gained 73.9%. In US dollar terms, the sector’s one-month performance was -1.9%, with a one-year return of 26.4% and a five-year return of 78.2%.
Jefferies notes that Prudential’s 6% rise was driven by stronger than expected sales in the first half of 2025 and improved capital returns, while AIA advanced by 3% as it remained on track to meet management targets. Beazley’s 13% decline came despite an underwriting beat, as management revised revenue guidance downward.
Jefferies highlights that Beazley’s management commentary has played a significant role in shaping the sector’s ongoing debate about pricing inflection. Just Group’s performance was noted as an anomaly, attributed to a takeover offer, while Prudential and AIA’s divergence from the SXIP index reflects Asia’s relative outperformance compared to Europe.
Consensus expectations for company fundamentals show that conglomerates are seeing upward revisions in current year earnings per share (EPS) for most of the sub-sector, while Zurich’s EPS and dividend per share (DPS) expectations have declined. Specialty re/insurers are also seeing higher current year EPS expectations, including Beazley, following a stronger than expected underwriting result in the first half of 2025.
Among life insurers, Prudential stands out with rising EPS expectations, although DPS expectations have fallen due to a lower implied payout from consensus net free surplus. Jefferies also notes that Sampo’s recent share split has caused some disruption in consensus figures, as not all broker forecasts have been updated. This has led to a break in the historical data as reflected in Visible Alpha, making direct comparisons more challenging for the time being.
In the background, the European insurance landscape is also increasingly being shaped by litigation risk, with 2023 seeing a record 133 class action claims filed across the continent – a 93% increase since 2019.
Legislative changes such as the EU’s Representative Actions Directive have expanded the scope for collective action, and the rise of opt-out class actions now outnumbers opt-in cases, signalling a structural shift in litigation trends for insurers.
Regulatory developments are also in focus. Insurance Europe, the industry federation, has reiterated its support for the Solvency II framework but has cautioned that additional sustainability risk requirements could drive up costs without delivering clear benefits.
The federation advocates for better alignment with existing regulatory frameworks, such as the Corporate Sustainability Reporting Directive and European Sustainability Reporting Standards, to avoid duplication and inefficiencies. Implementation challenges, including data limitations and inconsistencies in time horizon definitions, remain a concern for the sector.
The rise of social inflation and third-party litigation funding is contributing to higher claims costs and greater complexity in the European insurance market. Nearly 300 active litigation funders are now present in the EU, with investment in this area projected to reach €7 billion by 2032.
In response, the UK Civil Justice Council has called for tighter regulation of third-party litigation funding, emphasising transparency and mandatory legal advice for claimants as litigation risks grow in scale and complexity.
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