Kames' Wells: Reasons to be bullish on UK insurers

Higher returns expected going forward

It seems counterintuitive that companies announcing large losses and seeing earnings cut by 40%-50% are rewarded with higher share prices.

But that is what is happening for specialist UK non-life insurers such as Beazley, Hiscox and Lancashire. Is this a good time to be looking at specialist UK insurers?  The bullish view is a simple one. Globally, reinsurance prices are down by about a third since 2012, and many insurance markets have become steadily more challenging over the last five to six years.  The catastrophic losses in 2017 will likely exceed $100bn, and approach levels seen only twice before: in 2005 and 2011. The scale of losses will be large enough to turn prices upwards.  Peter Hargreaves: I don't think t...