Insurance Australia Group Ltd (ASX: IAG) shares were strong performers in April.
During the month, the insurance giant's shares rose a sizeable 6.6%.
This means that IAG shares are now up over 10% since this time last year, which compares favourably to the 0.2% decline recorded by the ASX 200 index over the same period.
Why did IAG shares have a strong month?
Interestingly, IAG shares smashed the market last month despite there being no news out of the company.
However, it is worth noting that IAG wasn't the only insurance share rising. It seems that investors were piling into the industry on the belief that higher interest rates will support strong earnings in the near term.
For example, QBE Insurance Group Ltd (ASX: QBE) shares were also on form and rose 6% in April.
Can IAG keep rising?
Brokers appear somewhat unsure on where IAG shares are heading from here.
Citi and Macquarie see scope for IAG to keep rising. They both have the equivalent of buy ratings and $5.50 and $5.60 price targets, respectively, on its shares. This suggests that they could rise by ~10% from current levels.
Citi believes "the story of building top line momentum and expanding margins is intact."
Over at UBS, its analysts are far less positive. Last month, the broker retained its sell rating and $4.30 price target on the company's shares. This implies potential downside of approximately 14% for investors.
The broker believes that recent stormy weather will push claims up and weigh on its earnings. In addition, the broker believes IAG shares are expensive at the current level.
Time will tell which broker makes the right call on this insurance giant.
