Africa-Press – Mauritius. Shares in South African life insurers Sanlam and Old Mutual are undervalued and don’t reflect their prospects for recovery, according to a research note from Barclays.
The country’s economic environment will be “mildly supportive” for a rebound in affluent lines such as life insurance.
Entry-level insurance business will be under pressure from higher inflation and declining formal employment, analysts Larissa van Deventer and Chee Chuen Lim write in the Jan 17 note.
The analysts expect “strong earnings recoveries” for Sanlam and Old Mutual for the full year 2021 from a low starting point in 2020, while stressing the element of uncertainty in their forecasts.
Barclays forecasts that Sanlam will report full-year 2021 earnings growth of 30%, while profit at Old Mutual will more than triple.
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