Insurance giants AXA, Allianz, and Zurich, have only one stock that outperformed the rest.
In a recent analysis, Goldman Sachs has provided its investment recommendations for major European insurers, offering a mix of buy, sell, and neutral ratings.
Zurich Insurance, a leading player in the industry, has faced a setback as Goldman Sachs has downgraded its rating from Neutral to Sell. The downgrade is primarily due to Zurich's valuation trading at the 98th percentile historically, indicating a high valuation bar. Concerns centre on Zurich's significant earnings exposure to the commercial property and casualty insurance segment, especially in the U.S. market, where pricing is moderating, and margin risks exist due to competitive pressures in key segments like commercial auto and specialty lines.
In contrast, Goldman Sachs maintains a Buy rating on AXA, the European insurance leader. The group’s diverse business model, including damage insurance (mainly car, home, property, and liability), life insurance (savings, retirement, health), and some banking activities, is viewed favourably. Goldman Sachs analyst Andrew Baker supports continued investment in AXA as of July 2025. However, Goldman Sachs considers AXA's stock expensive after its recent rally, suggesting caution for potential investors.
Allianz, another industry giant, does not have a specific recent Goldman Sachs rating or recommendation. However, in the broader European market context, Goldman Sachs expresses optimism about Europe’s economic prospects and reforms that could benefit insurers and pension funds by freeing them to engage more actively with early-stage investments, implying potential opportunities for large insurers like Allianz.
Additional insights from Goldman Sachs highlight a growing trend among insurers to increase allocations to private credit, driven by expectations of higher returns and benefits like portfolio diversification and return stability, which could influence insurers' investment strategies in the medium term.
For long-term investors focused on dividend strength and stability, Allianz remains a solid investment, but not a bargain at the moment. AXA, on the other hand, remains the most attractive among European insurers, despite being considered expensive after its recent rally.
In summary, Goldman Sachs currently recommends a cautious stance on Zurich, a positive outlook on AXA, and is generally optimistic on European insurers' environment without a specific rating for Allianz. Zurich Insurance's stock was downgraded from Neutral to Sell, and its price target was lowered to CHF 542. The price target for AXA was raised to €45 by Goldman Sachs. Allianz, while not receiving a specific rating, is still viewed as a potential opportunity due to Europe’s positive economic outlook.
In the context of the analysis, Goldman Sachs advises personal-finance investors to consider a Buy rating for AXA, the European insurance leader, despite its high valuation, owing to its diverse business model and long-term potential (personal-finance, AXA). On the contrary, Goldman Sachs has downgraded Zurich Insurance's rating from Neutral to Sell due to its high valuation, significant exposure to the commercial property and casualty insurance segment in the U.S., and competitive pressures in key segments (business, Zurich Insurance).
