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Investing.com -- Berenberg has re-initiated coverage on three leading Nordic non-life insurers—Sampo Oyj (HE:SAMPO), Tryg A/S (CSE:TRYG), and Gjensidige Forsikring (OL:GJFG)—pointing out the sector’s strong fundamentals, attractive margins, and disciplined market structure.
Sampo is reinstated with a Buy rating and price target of €11.20, while both Tryg and Gjensidige are rated Hold, with price targets of DKK165 and NOK250, respectively.
Analysts Carl Lofthagen and Michael Huttner argue that despite being smaller in scale compared to other European markets, the Nordic non-life sector stands out due to its “high margins and low volatility,” supported by a rational pricing environment, oligopolistic structure, and high barriers to entry.
“M&A has been a dominant driver of growth over the past decade,” they write, but expect a more subdued trend going forward, with pricing normalization likely in the next 12–18 months.
Sampo is Berenberg’s top pick, thanks to its broad geographic exposure and consistent underwriting results.
“Sampo offers investors lower risk, diversified underwriting exposure, with market-leading loss ratios and sustained, non-cyclical, growth opportunities,” Berenberg said.
The company’s transformation into a pure-play P&C insurer has brought its valuation in line with peers, after historically lagging due to its conglomerate structure.
While acknowledging the quality of Tryg and Gjensidige, the analysts flag valuation constraints and limited near-term catalysts, leading to their Hold ratings.
Tryg’s growth potential is seen as balanced by regulatory uncertainty and a likely softening of pricing, while Gjensidige’s reliance on the Norwegian market leaves it more exposed to local pressures.
“We believe that Gjensidige is the most exposed to a weakening pricing environment, given that its operations in Sweden and Denmark remain sub-scale,” the analysts wrote.
The Nordic non-life insurance sector trades at a 51% premium to the European insurance benchmark, a level Berenberg views as justified given structural advantages. However, the note suggests that growth will increasingly depend on organic factors rather than dealmaking.
While the Nordic market remains structurally attractive, investors should differentiate based on geographic diversity and underwriting strength—two areas where Sampo stands out, the analysts concluded.