Analysts Panmure Gordon have warned that three big insurers face a “watershed moment” following a turbulent six months for the sector.
In a release ahead of the insurance industry’s results season, the group warned that the strengthening of sterling and the chancellor’s overhaul of the annuities industry in the Budget this year would have an impact on profit.
“The sector has had an ‘interesting’ H1 2014 with the bombshell dropped by George Osborne in his March Budget probably being the stand out event,” Panmure said. It issued a positive rating for life-insurance but a negative for non-life, citing the over-capitalisation and low rates in the sector as factors.
The analysts posted “buy” recommendations for both Aviva and Partnership Assurance and a “hold” recommendation for RSA. All three faced a watershed moment, it added.