Investors remain wary of financial services company AMP as analysts consider the cost of rising unemployment, potential weakness in its flagship wealth management business and the risk that insurance price rises will encourage more people to drop their cover.
Higher than expected payouts for AMP's life insurance business could continue in the medium term and investors will likely "sit on the sidelines until greater clarity emerges" at its August results, Deutsche Bank warned.
With the unemployment rate tipped to increase during 2013, Deutsche Bank analyst Kieren Chidgey estimated that a 1 percentage point rise in unemployment could equate to $45 million in disability claims.
But others said Monday's share-price slump - when AMP shares shed 13 per cent to a 10-month low - had taken the downgrade into account.
AMP could also benefit from a change in federal government, JPMorgan said, if the Coalition watered down Labor's financial planning laws and opened up awards to retail super funds.
Shares in AMP closed down 0.7 per cent at $4.31 on Tuesday.