Citi Analysts Favor General Insurance Stocks Amid Market Uncertainty

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Highlights

• Citi maintains a "Buy" rating on QBE Insurance and Insurance Australia, while Suncorp and Medibank are rated "Neutral".
• QBE is Citi’s top pick, with potential to outperform FY25 forecasts by 92.5% if key improvements materialise; a share buyback is also possible.
• IAG preferred over SUN due to strong margins and justified valuation premium.
• Medibank and NIB Holdings expected to deliver solid performance, but regulatory risks remain a concern.

Citi analysts note a rise in market uncertainty post-reporting season in Australia, but expect favorable conditions for general insurers to persist longer than previous cycles. In their latest sector review, the brokerage highlighted QBE Insurance (ASX:QBE) as its top pick, with strong upside potential if key operational improvements are realised.

QBE, IAG, and Suncorp Ratings

• QBE Insurance (ASX:QBE) – “Buy” (Top Pick):

  • Citi sees significant upside if QBE executes its strategic improvements.
  • A share buyback is a possibility, which could further boost investor returns.

• Insurance Australia (ASX:IAG) – “Buy”

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