UPDATE 1-Lehman cuts target on big U.S. insurers, reinsurers

martes 8 de julio de 2008 14:21 CEST

 (Recasts, adds details)
 July 8 (Reuters) - Lehman Brothers cut its price target on
several leading insurers and reinsurers, citing challenging
financial markets and a deteriorating outlook for the property
and catastrophe reinsurance markets through 2010.
 Second-quarter results for non-life insurers should reflect
negative revenue growth, difficult earnings per share
comparisons versus a year ago, underlying margin deterioration,
and higher catastrophes, the brokerage wrote in a note to
 Most property and casualty insurers, except American
International Group (AIG.N: Cotización) and XL Capital (XL.N: Cotización), have modest
exposure to the credit crunch, strong balance sheets, excess
capital and are unlikely to raise capital or cut their
dividends, Lehman said.
 Lehman noted that American International Group has the most
exposure of the companies it covers to the credit crisis and
could suffer more investment writedowns.
 Property and casualty stocks could face pressure over the
next two months, reflecting seasonal concerns about hurricane
activity, but could present a potential buying opportunity in
September as hurricane concerns ease, it added.
 The following table lists the price target changes made by
Lehman. Company name                   Price target       
                         Current    Prior Allstate (ALL.N: Cotización)  
      $49         $55      Equal weight Arch Capital
(ACGL.O: Cotización)       $74         $80      Equal weight AIG (AIG.N: Cotización)   
          $29         $45      Equal weight Aspen Insurance
(AHL.N: Cotización)     $25         $30      Equal weight Everest Re (RE.N: Cotización)
       $99         $105     Overweight Flagstone Reinsurance
FSR.N                     $13         $15      Equal weight
Montpelier Re MRH.N       $16         $18      Equal weight
RenaissanceRe Holdings (RNR.N: Cotización)                     $49        
$57      Equal weight Travelers Cos (TRV.N: Cotización)       $55        
$62      Overweight XL Capital (XL.N: Cotización)           $22         $35
  Equal weight (Reporting by Sweta Singh in Bangalore;
Editing by Bernard Orr) ((sweta.singh@thomsonreuters.com ;
within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800;
Reuters Messaging: sweta.singh.reuters.com@reuters.net))