BUZZ-UK Non-Life insurance: HSBC takes stock

** HSBC says Britain's motor insurance market to see further premium rate increases while home insurance market to remain competitive

** Upgrade RSA (+0.1 pct) to "Buy" citing scope for further actions around debt restructuring, legacy portfolio, loss ratio improvement and upside risks to the cost target

** Retain "Buy" on esure (-1.04 pct) as the insurer benefits from rate increases in the motor segment and has a comfortable capital position. The analysts forecast c17 pct CAGR in 2015-18e for operating earnings

** Apart from a slump seen in Q1, premiums have been trending upwards due to rising costs of crash repairs for increasingly complex vehicles, high levels of false claims for whiplash injuries and a rise in uninsured driving

** Downgrade Hastings (-1.45 pct) to "Reduce" and retain "Reduce" on Direct Line (Other OTC: DIISD - news) (-0.1 pct), despite both cos gaining from motor rates increases

** Say Direct Line is a well-capitalised insurer, but 2015-18e operating earnings could fall at a CAGR of c3 pct and total dividend yield could fall to 6.6 pct in 2018e from 7.8 pct in 2016e

** Retain "Hold" on Admiral (-1.4 pct) as the analysts wait for more disclosure on its UK home segment (Reuters Messaging: noor.hussain.thomsonreuters.com@reuters.net)