Investing in insurance stocks in the wake of Hurricane Katrina is a way to capitalise on kneejerk valuations, says Iimia growth manager Nick Greenwood.Greenwood has invested a portion of the 15m Iimia growth portfolio in the Hiscox insurance portfolio fund, which invests globally in insurance companies and has a one-third exposure to insurers affected by hurricane claims. In August, the Hiscox fund returned -4.4 per cent, reflecting a sell-off in the asset class. Greenwood believes insurance stocks look cheap and will increase his stake in the fund if valuations fall further. He says, in times of high inflation, insurers can generate returns by investing the profits from writing policies but lower inflation has forced insurers to improve efficiency and reduce underwriting risk, bringing a marked improvement in the businesses which has not been reflected in their valuations. Greenwood says: “We are still in the middle of the hurricane season and if there is another storm we may see another kneejerk reaction in insurance valuations. These businesses are having to improve to survive and, in the long term, storms are good for business as people recognise the need for insurance.”
According to a recent report, a homosexual couple applied at an HSBC branch for a mortgage that required life cover and were told they could only take out insurance if they took an HIV test.
Morley has appointed Robert Graham-Brown as a fund manager to its North American equities team. He joins from Threadneedle where he was a US equity fund manager.Graham-Brown will join in October and report to head of North American Equities, Penny Kyle.
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The Mortgage Business House to House: BBR + 0.89 until 28.2.07
The advent of Basel Two may mean significant changes to mortgage products and client credit checks, says John Charcol senior technical manager Ray Boulger. With implementation only 18 months away, lenders are preparing systems to incorporate the stringent risk management measures required by the international regime. Boulger believes lenders will have to adopt credit-scoring across […]
By Rob Burnett, head of European equities, Neptune After nine years of underperformance versus quality growth, Rob Burnett, manager of the Neptune European Opportunities Fund, believes that value strategies have reached an inflection point. Watch Rob discuss why he believes value is well positioned to resume its historical trend of outperformance. Click here to watch […]
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