Global banking giant Citigroup knows a thing or two about Australia's domestic general insurance sector, with these three stocks on its pick list at present.
Suncorp Group Ltd (ASX: SUN)
Shares in Queensland-based financial services conglomerate Suncorp Group Ltd were up close to 1 percent at the time of writing to $13.74 after a volatile year of share price movements including a bottomed-out price of $12.53 in September 2017.
The Citi broker said Suncorp would likely enjoy tailwinds from a rise in premium rates from its April billing period onwards, particularly in motor and commercial insurance lines, and maintains a buy rating on the stock despite not being convinced Suncorp will deliver its 10% cash return target for FY19.
Suncorp has been in the news lately for the roll out of Google Pay as part of its refurbished digital strategy and is currently trading about 0.9% above its 200-period moving average in an upward trend.
Insurance Australia Group Ltd (ASX: IAG)
Shares in general insurance company Insurance Australia Group Ltd are also on the up today at $7.83 at the time of writing after tracking upwards steadily for the past 12-months from $6.01 at this time last year.
Citi has retained a neutral rating for Insurance Australia Group, but still ranks the stock highly although acknowledging its share price is sitting a tad high.
Insurance Australia is currently trading about 7.5% above its 200-day-period moving average after reporting encouraging first-half results in mid-February with like-for-like gross written premium growth of around 4% and a notch up of its FY18 margin guidance to between 15.5% and 17.5%.
AMP Limited (ASX: AMP)
Shares in Australia and New Zealand's independent wealth management company AMP Limited were down 0.3% to $5.23 at the time of writing with plenty of ups and downs in share price to report over the last 12 months.
Despite some volatility, the Citi broker has maintained a neutral rating on the stock, with AMP currently trading 5.8% above its 200-day moving average, with AMP's planned portfolio review likely to be the key to the company's performance.
The Citi broker has also noted a potential upside for QBE Insurance Group Ltd (ASX: QBE) if "management can turn the business around".
QBE Insurance was trading up slightly today at $9.81 after tracking down for the last 12-months from a share price of $12.91 at this time last year.
The Citi broker said big-name insurers could be knocked off their perch in the future if Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) manage to snare market share in the profitable home and motor products sector – which Insurance Australia Group is also chasing hard.
