Ace A Good Bet Despite Egyptian Chaos

Ace Ltd., which has its global headquarters in Bermuda, has more than sufficient capital to withstand claims emerging from current turmoil in Egypt [pictured] – and investors are being encouraged to buy the insurer’s shares by analysts at Credit Suisse.

Bloomberg reports today [Jan. 31] that Credit Suisse is recommending Ace to investors because because the firm typically has lower than industry-average losses from political risk.

Ace and Bermuda-based Axis are among global catastrophe re/insurers expected to  face political risk claims resulting from ongoing demonstrations in Egypt, Bloomberg quotes a new Credit Suisse report as saying . The insurance protects investors, lenders and exporters from losses on political violence and events such as confiscation or government nationalisation.

Ace has about $1.8 billion at risk from the policies in the Middle East, Turkey and  Africa — and has $3 billion in excess equity capital on hand. The company’s share price  slipped 3.2 percent on the New York Stock Exchange on January 28 as protesters began to clash with police and torch buildings in cities throughout Egypt, demanding the resignation of President Hosni Mubarak.

“We would be buyers of the stock on further weakness related to this issue, since we believe that ultimate losses should be substantially lower than gross exposures,” said Credit Suisse, which rates Zurich-based Ace as  ”outperform” while maintaining a “neutral” ratings on Axis.

Read More About