Aussie Insurers SUN, IAG, QBE - Anyone holding?

[Humphrey Appleby]

Suncorp, QBE, IAG - Is anyone currently holding any of these?

I used to have shares in IAG until very recently tied into their employee share plan (opted to get paid out when I left NZI), never really paid it much attention save for the periodic dividend cheque in the mail. Now that I'm out I'm pondering should I get back in; even just as a regular earner more than anything.

A colleague once told me it was foolish investing in insurance companies, mind you he lost a fortune in AMP so he's probably a bit biased.

Does anyone here agree with that or would it be worth the time putting up a Buy order?

Cheers

[percy]

First of all welcome to sharetrader.
Insurance companies make their money two ways.
First of all underwriting,and secondarily by investing the premiums [float] before having to meet claims.
Over the past two years they have not been able to earn a very good return on their floats.
So that leaves underwriting.Paying out huge claims [earthquakes,storms,flooding etc] means underwriting has been underwater.
Therefore insurance companies are having to raise their premiums substantially.
Going by the ongoing problems ChCh residents are having with their insurance companies it is not a sector I would want to invest in.
Maybe you having worked in the industry will have a better understanding of the sector than me.

[Humphrey Appleby]

Cheers percy,

Yeah that was my reckoning, certainly with recent events in Fiji things can't be looking too good for insurer loss ratios.

It is certainly true that there is no such thing as cheap domestic insurance anymore (even direct like AMI, State, AA, etc are rising), however we've seen a serious softening of the market in NZ for commercial insurance over the past six months, insurers are slashing their company and EQ rates on commercial risks left, right and centre in an effort to increase written premium and rebuild client loyalty post quakes; all this is despite the Valentines Day rumble here in Chch as well.

I was in intermediated commercial accounts at NZI but moved over to the Dark Side late last year to become a broker.

From an industry point of view, Suncorp (Vero, AA) are doing pretty well, they're profits are up; IAG are suffering because their reinsurance costs have just about doubled; and as for QBE, I honestly have no idea, despite operating in NZ for 100+ years, they've been a very passive insurer and as a result don't really have that much written business, that said, they've been writing risks VERY cheaply since they jumped into bed with Crombie Lockwood most likely because the broking community probably threatened to cut them off because of it.

I figure it might be better to get something outside of the industry with the investing public to gauge opinion. Something rooted in investment fact, rather than industry opinion... ;)

[macduffy]

Yes, welcome Humphrey!

I hold a few Tower - remnants from the privatisation of NZ Govt Life, from memory - and had a small dabble into the CBL IPO last year, so far successfully. Apart from that I keep a watch on QBE although don't see the shareprice doing a lot until interest rates recover from the depths. ( As an aside, I wonder how much damage negative rates are doing to insurance co's float income worldwide? Another reason to raise premiums?)

All investments have their risks but the "peculiarities" of insurance accounting makes them particularly difficult for non-industry investors to value. So not a lot of discussion in these forums!

Cheers

[mayday]

Suncorp, QBE, IAG - Is anyone currently holding any of these?

I used to have shares in IAG until very recently tied into their employee share plan (opted to get paid out when I left NZI), never really paid it much attention save for the periodic dividend cheque in the mail. Now that I'm out I'm pondering should I get back in; even just as a regular earner more than anything.

A colleague once told me it was foolish investing in insurance companies, mind you he lost a fortune in AMP so he's probably a bit biased.

Does anyone here agree with that or would it be worth the time putting up a Buy order?

Cheers

me just in QBE for long-term investment :)

[silu]

I'm in IAG, subscribed to the DRIP and just gonna leave it there most likely for a few years.

[duncan22]

With middle-income travellers from China & India rapidly growing and forecast to continue ive bought into Covermore (CVO.ax) travel insurance company which has expanded there - still early days but they certainly are on a sector with momentum!

[silu]

Most profitable Trump Slump ever.
Bought more IAG and smallish parcels of QBE & SUN after Trump's election. Have nicely increased in SP since then. Sold all except IAG which I still like and continue to hold because of DRIP.