Insurance sector: moral hazard
Several insurance companies are now contemplating rights issues to bolster their capital positions. Analysts give their opinions on whether the rights issues are good news for bond investors, and what the credit outlooks are for firms in the European insurance sector.
Lehman Brothers
European insurance sector spreads seem to be stabilising although certain names remain volatile and headlines still provide surprises. Some are positive, such as the rights issues by Legal & General and Zurich Financial Services, and some are negative, such as Allianz’s €750 million capital injection into its US P&C business or Generali’s disappointing interim results. Overall, we have changed our sector recommendation to neutral from underweight as we
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