Slipping back to second place after four years on top are Karen Chan and her five-person Bank of America Merrill Lynch team. From their offices in Hong Kong, South Korea and Taiwan, they report on 20 Asian insurers. The group prefers Chinese providers over their regional peers, reasoning that “their operating performance has hit bottom in the past year and will see gradual improvement this year,” Chan says. That nation’s insurance stocks trailed the wider sector by 6.4 percentage points over the 12 months through late April, slipping 3.8 percent. Regarding individual companies, Chan and her colleagues are sticking with Hong Kong–based AIA Group as their top pick. Growth prospects for the second-largest insurer headquartered in Asia are especially promising, they believe. In addition, AIA’s balance sheet is strong enough to support expansion, and its value of new business is poised to beat expectations. Another team favorite is Beijing-based China Life Insurance Co., which the analysts recommend as an impressive turnaround story. |
The 2014 All-Asia Research Team: Insurance, No. 2: Karen Chan & team