April 2025 CPI Data Bode Well for Insurance Sector

This report is an updated version of the report published on 29 May 2025 at 1:15 PM AEST.

Company Overview

Company Overview: AMP Limited (ASX: AMP) is an Australia-based company, which provides banking, superannuation, retirement and financial advice services in Australia and New Zealand. Its businesses include AMP’s Platforms, AMP Bank, AMP’s Master Trust, AMP Advice, and AMP New Zealand Wealth Management, which provides general insurance products. Liberty Financial Group (ASX: LFG) conducts activities and makes investments in the financial services industry, including but not limited to specialty lending, finance and insurance brokering, receivables servicing, consumer insurance underwriting, real estate and funds management across Australia and New Zealand. Kalkine’s Sector Report covers the Investment Summary, Sector Overview & Supporting Catalysts, Data Insights & Analysis, Financial Metrics, Financial Commentary, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on selected stocks.

Investment Summary

Sector Overview and Supporting Catalysts

Data Insights and Analysis

Index Performance

Investment theme and stocks under discussion (AMP, LFG)

After understanding the sector, let us now look at two companies from the Insurance sector listed on the ASX. The price potential of the companies under discussion have been analysed based on Price/Book Value based relative valuation method.

1. ASX: AMP (AMP Limited)

(Recommendation: ‘Speculative Buy’ at AUD 1.275; Potential Upside: Low Double-Digit; MCap: AUD 3.17bn)

AMP Limited is an Australia-based company, which provides banking, superannuation, retirement and financial advice services in Australia and New Zealand. Its businesses include AMP’s Platforms, AMP Bank, AMP’s Master Trust, AMP Advice, and AMP New Zealand Wealth Management, which provides general insurance products.

The stock has witnessed a correction of ~7.99% in last three months, and over the past six months, it has decreased by ~18.65%. The stock has a 52-week low and 52-week high of AUD 1.040 and AUD 1.790, respectively and is currently trading below the 52-week high-low average. AMP was last covered in a report dated ‘20 February 2025’.

2. ASX: LFG (Liberty Financial Group)

(Recommendation: ‘Speculative Buy’ at AUD 3.120; Potential Upside: Low Double-Digit; MCap: AUD 941.16mn)

Liberty Financial Group (ASX: LFG) conducts activities and makes investments in the financial services industry, including but not limited to specialty lending, finance and insurance brokering, receivables servicing, consumer insurance underwriting, real estate and funds management across Australia and New Zealand.

The stock has corrected by ~17.68% in the last three months, and over the past six months, it has declined by ~3.11%. The stock has a 52-week low and 52-week high of AUD 2.920 and AUD 4.250, respectively and is currently trading below the 52-week high-low average. LFG was last covered in a report dated ‘31 January 2025’.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an Indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 29 May 2025. The reference data in this report has been partly sourced from REFINITIV. 

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: - 

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.