STOCKS NEWS EUROPE-Insurers gain strongly, HSBC bullish

Shares in European insurers gain strongly, with some hitting their highest levels in over a year, amid bullish broker comment and as investors buying into the sector in anticipation of a strong performance this year, analysts say.

"We think there's an element of sector rotation," says Barrie Cornes at Panmure Gordon in London.

"More and more of the institutions we're talking to who have been clear of the sector for the last two years are now looking at it again."

A research note from HSBC says that efforts by leading insurers to highlight their cash generation have won favour with investors seeking generous dividends.

"Cash metrics are gaining prominence as a valuation tool with the sector having the second highest free cash flow yield in Europe," the note says, while higher bond yields are also giving support to life insurers.

Switzerland's Swiss Life (SLHN.VX) is the sector's top riser with gains of 5.4 percent, followed by Anglo-South African insurer Old Mutual (OML.L) and Dutch bancassurer ING (ING.AS), up 4.4 percent and 4.5 percent respectively.

Allianz (ALVG.DE), Aviva (AV.L), and Prudential (PRU.L) also rise strongly, posting gains of between 3 and 4 percent, while the STOXX 600 Europe Insurance index .SXIP is 2.4 percent higher.

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