insurance-general-developed-value

name	insurance-general-developed-value
description	Valuation criteria for developed market value general insurance stocks. P/B 0.7-1.5x, Combined Ratio <100%, investment yield benchmarks, and dividend sustainability assessment.
metadata	{"sector":"insurance","sub_sector":"general","scope":"exclusive","market":"developed","stock_type":"value"}

General Insurance — Developed Markets Value Strategy

Primary Method: Price-to-Book (P/B) Ratio + Combined Ratio + Investment Income

Key Metrics

Metric	Target	Assessment
P/B Ratio	0.7-1.5x	Fair value typically 1.0-1.2x; below 0.9 signals value opportunity
Combined Ratio	<100%	<100% = underwriting profit; >100% = underwriting loss
Underwriting Profit Margin	>5%	Combined Ratio converts to margin: 95% CR = 5% margin
Investment Yield	4-5%+	UK gilt yields 4.45% (Feb 2026); use as benchmark
Dividend Yield	3-5%	Sustainability check vs combined ratio
Expense Ratio	<30%	Operating efficiency as % of premium

Benchmarks

• UK Motor Insurance: Admiral Group maintained combined ratio <90% (exceptional; industry average 95-110%)
• General insurers trade 0.7-1.0x P/B during market peaks, 1.0-1.5x during troughs

Investment Income Impact

• Rising gilt yields (2026: 4.45%) boost insurer profitability significantly vs 2016-2021 near-zero environment
• Investment income now 20-30% of total earnings for well-positioned insurers
• Reinvestment risk if rates fall; assess portfolio duration