Italian insurers represent an attractive
investment, particularly in the context of
HSBC’s global equity strategy view.
The sector offers: 1) defensiveness;
2) stocks with favourable catalysts and
gearing to rising markets
 Fondiaria-Sai (OW, PT down to EUR37.9
from EUR41.0) is our favoured play –
ordinary shares offer 41% potential total
return and we expect targets to be
revised upwards in 1H08
 We like Alleanza as a defensive play in
the European sector – we raise our
price target to EUR9.5 (from EUR9.1)
and upgrade to Neutral (from UW)
HSBC’s global strategists expect 2008 to be a year of two
halves, with no positive catalysts and markets testing lows in
Q108, followed by indices eventually rallying to new highs.
Italian insurers look attractive because they have virtually no
exposure to the USD or the alphabet of fixed income assets
that concerns the market. The sector is also well-capitalised.
Fondiaria-Sai trades at an attractive 0.98x 2008e EV and
7.4x 2008e PE. We also expect consensus estimates to rise
on the back of its revised business plan in 1H08.
We believe Alleanza is a good store of value given buyout
support, valuation and a 5.6% 2007e dividend yield. While we
recognise the attractions of Generali as a defensive name we are
concerned by its relatively rich valuation and M&A risk.
We still prefer Banca Generali to Mediolanum in asset
gathering given limited exposure to regulatory changes, no
back-book issues, uplift from a lower tax rate and valuation.

Investment Summary 5
Italian insurance in context 5
Stock summaries 5
Update on industry data 9
Life insurance 9
Asset gathering 9
Non-life pricing 10
Alleanza 12
Banca Generali 16
Fondiaria-Sai 20
Generali 25
Mediolanum 31
Disclosure appendix 38
Disclaimer 43