The Suncorp Group Ltd (ASX: SUN) share price opened lower today and is currently down 1.26% at $11.73.
Other ASX financial shares are mostly in the red this morning as well. The benchmark S&P/ASX 200 Index (ASX: XJO) is down 0.47%.
One expert reckons ASX insurance shares are "extremely cheap" and is backing Suncorp ahead of the rest.
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Why is the Suncorp share price cheap?
Paul Taylor, the portfolio manager for Fidelity's Australian Equities Fund, says insurance is "by far" one of the cheapest sectors in the market today, alongside ASX energy shares and materials shares.
He points out that insurers are raising their premiums in today's inflationary environment.
Taylor said:
The insurance sector is… extremely cheap and with premiums on the rise, we believe the general insurance sector is well positioned for growth.
The Fund has significant over-weight positions in… Suncorp.
The Suncorp business is changing
Taylor says his team has been "recession-proofing" their fund by structuring it into these areas.
They are essential goods and services, cheap sectors, and self-help businesses (i.e., those that can, or are, making positive pivots to adapt to today's economy and/or strengthen their position).
Taylor reckons Suncorp shares are not only cheap but also that the company is in self-help mode, given it is trying to sell its banking business to Australia and New Zealand Banking Group Ltd (ASX: ANZ).
Taylor explains:
Suncorp has been simplifying its business and, with the sale of the bank, will become a very focused general insurance business.
This greater business focus should bring considerably improved valuation metrics.
Suncorp is currently seeking government approval for the $4.9 billion takeover deal.
As fellow Fool Brooke reported last month, Suncorp and ANZ are hoping to complete the deal in the second half of 2023.
Suncorp plans to return most of the expected $3.21 per share profit to its shareholders.
Suncorp share price snapshot
Brooke also reports that insiders have been taking advantage of the fallen Suncorp share price.
Last month, two company directors bought a combined $320,000 worth of shares. At the time, the Suncorp share price was in the $10 range.
Their new holdings are already up by more than 10%.
The Suncorp share price is up 12.5% over the past month and up 2.2% in the year to date.
By comparison, the ASX 200 is up 6.65% over the past month and down 6.35% in 2022 so far.
