Reinsurer & Bank TBV Multiples

Given the increase in the tangible book values (TBV) of reinsurers over the past few quarters, I wanted to quickly update the graphic shown in previous posts (like this one) to see how the share price changes (generally flat over 2014 since the run-ups in 2013) over that time have impacted multiples. The graphic below is based upon a limited pool of pure reinsurers only which doesn’t include the specialty insurers (who on the LSE generally have higher multiples than their European and Bermudian brothers, as a previous post shows). As it turns out, the mounting pricing pressures in reinsurance have impacted current market values and based on Q1 TBV the multiples are therefore relatively stable since the end of 2013.

I wanted to compare the change in TBV multiples for reinsurers against those for banks, particularly for the global banks, but have not been able to get the clean data on the banking sector. The red line below is based upon data on all publically traded banks up until 2010 with adjustments made on the data from 2011 to 2014. With both sets of data, it’s difficult to include a consistent set of firms given the structural shifts and business changes in both sectors. The current diversion in trends between US & European banks is a case in point. So a health warning applies on the data.

click to enlargeReinsurers & Banks NTA Multiples June 2014

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