European insurers outperform in 2025 as life insurance makes comeback

EUROPEAN INSURERS OUTPERFORM IN 2025 AS LIFE INSURANCE MAKES COMEBACK

European insurers have outperformed in 2025 by around 12%, bolstered by top line strength of life insurance, according to Deutsche Bank analysts who remain positive on the space.

A STOXX insurers basket (.SXIP) is up 18.6% this year, dwarfing an 8.7% rise for the STOXX 600 SXXP.

"One of the key themes to come out of 1Q25 was the strength in the top line of Life

Insurance across the composites," write the DB analysts; a reversal from recent years' focus on non-life insurance which tends to be less capital-intensive and benefitted from a hard

pricing cycle.

They upgrade the Netherlands' NN Group NN and the UK's Phoenix PHNX and Prudential PRU to buy from hold, citing valuation differentials, increased management guidance, and potential for share buybacks

They downgrade Germany's Allianz ALV, the Netherlands' a.s.r. ASRNL, and the UK's Legal & General LGEN to hold from buy.

"...despite their high-quality franchises, we see better value elsewhere in the sector and limited upside to our target prices."

Conversations at a recent conference centred around first-order impacts of potential tariffs including potential earnings hits from dollar depreciation.

"However, a lot of conversations focused around second-order impacts – and more

specifically, the delay in transmission of monetary policy and the benefit of potential German fiscal stimulus for the wider European economy."

(Lucy Raitano)

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