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Friday, March 4, 2011

Allianz - Your A-Z Insurance Provider (OSK)

Riding on potentially strong growth in the life insurance industry and a re-rating of motor insurance, Allianz as the biggest general insurance player is poised to benefit from the encouraging industry outlook. The company is also seeking to establish a foothold in the fast growing takaful industry to diversify its business.

We initiate coverage on Allianz with a BUY call and target price of RM5.68. Our sum of parts (SOP) valuation is based on: i) the industry average PER of 13x for general insurance, and ii) P/EV of 1x on the embedded value (EV) of RM500m for its life insurance business.

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