July 13, 2023

Vienna Insurance Group for an uncertain world

Vienna Insurance Group for an uncertain world

To bystanders like us, it seems as if the world is becoming increasingly uncertain. While unsettling, it may also mean that insurance companies are positioned to profit. Dr. Hermann Stern shares this opinion, so he looked for an insurance company to invest in, used the Obermatt Filter to find an XX-Large company and discovered Vienna Insurance Group. We’re bringing you his findings.

PRO: These three points speak for a buy:

  1. Very good Obermatt ranks. The 360° View for Vienna Insurance Group is 99, which makes the company a better overall performer than almost all of its European competitors. Its Sentiment Rank is 100: the market approves of the company.
  2. As we already noted in previous blogs, investing in insurance companies helps reduce the risks of the entire portfolio, as these companies generally don’t follow the performance of the entire stock market.
  3. Vienna Insurance Group, as one of the largest insurers operating in Ukraine, will fast track access to foreign reinsurance capacity once reparations are possible, according to a recent statement.

CONTRA: These three points argue against it:

  1. Somewhat worse Growth and Safety ranks due to lower Leverage and Profit Growth ranks.
  2. A Combined Rank of 37 means that Vienna Insurance Group has a worse financial performance than 63% of its European peers. We aren’t worried though, as its 360° View shows a different picture and it makes us confident.
  3. As a change in top management is happening this month, it may not be the best moment to invest. On the other hand, the new CEO has been a long-running deputy CEO and a member of the managing board, so we don’t expect to see major changes.

Dr. Stern looked through all of the pros and cons and decided he wanted to buy VIG for his portfolio and our analysis supports this decision.

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