Dealmakers hope Ageas opens European share sales door as insurers ride out tariff turbulence

By Aidan Gregory

April 16 - (The Insurer) - Some dealmakers are hoping Ageas' 550 million euro ($624 million) capital raise will encourage investors to support further insurance share sales after the May and June earnings season.

• Ageas' share sale success shows investors willing to support growth capital raises for European insurers

• Insurance stocks resilient amid tariff turbulence, Stoxx Europe 600 Insurance Index up 12.1%

• UK insurance sector attracts strong investor interest, trading at attractive valuations

The Ageas share sale to finance its purchase of esure was the first major block trade in Europe since U.S. President Donald Trump's trade tariffs triggered global equity market volatility, and the largest by a European insurer since November 2021.

Three bankers told The Insurer that the success of the Ageas share sale shows there are funding opportunities for European insurers, while shareholders may have opportunities for secondary sell-downs at attractive valuations.

“For ECM, the market demonstrated that it is open for short-dated products,” said a banker close to Ageas. “We can do ABBs, particularly for stocks that are not drastically affected by tariffs."

Ageas’ share sale was "multiple times covered," bankers said, adding that they did not disclose figures covered, and the final deal size exceeded its initial target by 25 million euros. The Brussels-listed company's shares were trading at 52.80 euros at 1207 GMT on Thursday, up 5.3% from the offer price in the capital increase.

“It was partly expected after they announced the M&A,” said a second banker close to Ageas. “Ultimately the transaction was very well received, and it was good to reopen the equity market this way.”

Insurance stocks have traded resiliently throughout the past two weeks, particularly since last week's U.S. tariff reprieve. The Stoxx Europe 600 Insurance Index is up 12.1% year-to-date, versus a 1.2% fall for the Stoxx Europe 600 Index.

The sector is not impacted directly by trade tariffs, although insurers are vulnerable to interest rate volatility and falling asset prices.

"The beauty about the insurance sector is that it has a very long-term perspective, and if we remember the financial crisis, the insurance sector also was rather resilient, apart from a few exceptions," said Peter Wand, a partner at Baker Mackenzie in Frankfurt.

"Premium income typically is rather stable, and asset management is done with a long-term perspective. So, it's a rather resilient sector not affected by market volatility in the short term," Wand added.

The major European composites such as Allianz, AXA and Generali have recovered most of their initial losses from the sell-off, while the UK names such as Admiral, Beazley and Hiscox are all up over the past month and trading at attractive valuations.

UK equities have held up well due to the country’s relatively light tariff rate of 10% imposed by Trump, and several dealmakers have told The Insurer that there is strong investor interest in the UK’s insurance sector. The FTSE 100 is almost flat for the year to date.

“If you look at Admiral, for example, you can just see that the share price is trading up like there's such good solid demand, particularly on the UK side of things too,” said the second banker. “So, a lot of people are positive about the UK insurance macro.”

Many companies are now in blackout due to earnings season, which is expected to be relatively benign for the insurance industry, despite large losses from the LA wildfires in January.

Once the market reopens, there is a substantial pipeline of block trades that could be launched in Europe, with insurance one of the sectors where bankers say deals are likely to be doable.

“We are hitting a lull anyway due to earnings,” said the first banker. “In May-June, we will have a big window for ABBs.”

The first quarter of 2025 was barren for insurance ECM in Europe, with no transactions, according to LSEG data. Just $65 million was raised last year, down from $560 million in 2023 and $2.4 billion in 2022, LSEG data shows.

Ageas' share sale was the largest by a European insurer since Denmark's Alm Brands raised $1.6 billion in November 2021, LSEG data shows. The last major primary accelerated bookbuild in the region was a $427 million capital raising by Talanx in September 2023.