It Never Rains but It Pours. Swiss Life Carries 4.55% Dividend Yield

The war between Russia and Ukraine is a terrible thing and something that has been brewing for close to 20 years. The effects on the citizens of Ukraine are devastating. Insurance touches so many areas within people's lives that in this scenario makes it hard to accurately predict the effects on sales and claims. And because most businesses are diversified it is difficult to find the data to do so in isolated events. While most insurers are playing down the impact of this war, playing down is nothing new. We think there are several easy-to-place risk principles that include lowering motor accident frequency as a result of the rise in oil prices, that is likely to be more than offset by rising severity via the higher price of aluminium. However, this latter dynamic is likely to take longer to feed through. Furthermore, travel insurance will be affected along with business interruption and trade and credit insurance. While we hold our fair value estimates steady as well as our moat ratings we think it is probably better to avoid investing in Allianz at the moment. For those who want European insurance exposure and to position themselves as defensively as possible against this war we recommend Swiss Life, which carries a 4.55% dividend yield.