The 2014 All-Europe Research Team: Insurance, No. 2: Jonathan Hocking & team

< The 2014 All-Europe Research Team

Jonathan Hocking & team
Morgan Stanley

First-place appearances: 0

Total appearances: 6

Team debut: 1989

London-based Jonathan Hocking and his six-person Morgan Stanley troupe repeat in second place. “The team not only provides insightful research but is great at explaining this opaque sector to nonindustry specialists,” avers one supporter. For the year ahead, French property/casualty insurer AXA Group and England’s Prudential are favorites among the 39 names the analysts track. AXA boasts an attractive valuation and “increasingly robust” balance sheet, explains Hocking, as well as “scope for the dividend payout to increase.” Life insurer Prudential “has best-in-class business units, strong cash generation and medium-term upside potential in the dividend,” he notes. As for the sector overall, now that the implications of the European Union’s Solvency II program to harmonize capital-adequacy requirements for insurers and reinsurers across the region are better understood, the Morgan Stanley crew expects to see “more aggressive capital management,” says Hocking. Finally, the researchers are forecasting “a continued reduction in the cost of equity,” he says, “which can drive a further leg of share price performance for European insurers.”