The US financial crisis and resultant slide in the Australian stock market has seen local insurance shares emerge as diamonds in the rough.

Credit Suisse analyst Arjan van Veen told insurers with substantial retail exposure are particularly likely to feature on investor watchlists.

“In order of preference I would put IAG, Suncorp, and then QBE,” he said. “IAG has the biggest personal lines exposure. It definitely has the most defensive stocks. Suncorp is cheap at the moment but there are concerns with its banking operations.”

In other media reports analysts have tipped QBE Insurance as the potential market mover, but Mr van Veen believes that in the longer term QBE’s predominantly commercial operations leave it vulnerable to declining global pricing.

Among analysts generally it is media, insurance, healthcare and telecommunications stocks that garner most of the favouritism.
by Staff and Writers
6th October 2008

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