Stockwatch

Insurance brokers hit new highs this week, as Numis Securities reckoned they will benefit from an improved insurance rate outlook following Hurricane Katrina and potential bid speculation.

Jardine Lloyd Thompson was trading at an eight-month high of 480p, after Numis upgraded the shares from 'sell' to 'buy' and hiked its target price from 345p to 535p. And Benfield was at an all-time high of 327p after it was moved from 'sell' to 'add', with a raised price target of 350p, up from 210p.

However, dealers were more concerned about Goshawk, questioning the insurer's ability to raise money after it doubled its net loss estimates for Hurricane Katrina to $60m.

Goshawk, which a fortnight ago reiterated that it was "looking at capital-raising initiatives to allow maximisation of opportunities in the future hardening market, to secure its capital position and to reaffirm its rating", was trading at around a five-year low of 24p as Insurance Times went to press.

KBC Peel Hunt, which gave Goshawk a 'sell' rating, said: "Catastrophic losses from Katrina and Rita ($90m in total) will cast a shadow over the group as a going concern - it is now vital to raise capital quickly or go into run-off. Rating agencies will downgrade further without urgent news on capital raising."

' Yvette Essen is stock market reporter and insurance correspondent for The Daily Telegraph
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