Forsyth Barr has placed a $385 million to $450 million valuation on CBL, which implies a price-to-earnings (PE) ratio of 12.3 to 14.4 times in the 2015 calendar year and 9.5 to 11.1 times in 2016.
UBS has a valuation range of $310 million to $460 million, implying a 2015 PE of 9.9 to 14.7 times.
Not surprisingly, the pre-marketing research is bullish on CBL's prospects.
UBS analyst Marcus Curley is forecasting a 28 per cent lift in underlying profit to $31.2 million in the 2015 financial year.
In his note he says CBL's underwriting margin - which averaged 18 per cent between 2004 and 2014 - was well ahead of the 10 per cent averaged by major property and casualty (P&C) insurers over the same period.
"Our analysis suggests CBL's superior underwriting outcome mainly reflects stronger margins within specialty P&C segments," Curley says.
"In particular, the average underwriting margin for speciality P&C insurers over the same seven-year period was 15 per cent."
The main driver of CBL's outperformance, he says, is its more limited exposure to natural and man-made disaster losses.
Curley says key risks facing the company include increased competition and losing a key insurance partner.
The company generated 66 per cent of gross written premium in 2014 from four external relationships, according to UBS.
Difficult path
CBL has faced a hard road on its path to going public and may encounter more challenges as it pushes to get its offer over the line.
The company was initially targeting a listing before the end of June, but has faced delays.
Market sources say CBL's management has been holding numerous meetings with fund managers in a bid to convince them that the deal is a goer.
The company is profitable, with significant growth prospects, but does most of its business overseas in a niche area of insurance that is not well understood in New Zealand.
Then you've got the equity market volatility, which is likely to make investors more wary about participating in IPOs.
Talking to fund managers, you get a sense that following a flurry of listings last year - many of which have since faltered - they're feeling no compulsion whatsoever to invest in more floats.
"Off the record, the door is closed," one institutional investor told Stock Takes.
In addition to CBL, companies including chicken producer Tegel and Rank Group's Carters Building Supplies are looking to list.
Finally, after a six-year bull run on the NZX, the recent turmoil is providing some long-awaited secondary market buying opportunities, which further reduces the attraction of IPOs.
In its August monthly report, Devon Funds Management said the volatility had provided opportunities for its Alpha Fund to deploy cash back into stocks at "more attractive price points".
"The cash weighting in Alpha fell to 20 per cent by month-end [from 40 per cent previously] as we invested in Westfield Corporation and Contact Energy."
Where to next?
The big question now is how long the volatility will last and whether the NZX will enter correction territory or even a full-blown bear market situation.
Unlike Wall St, the local market is yet to go into a correction - a fall of 10 per cent or more from a recent peak. A bear market requires a drop of 20 per cent or more.
The S&P/NZX 50 Index is down 6.5 per cent from its August 3 closing peak of 5957.9.
One of the biggest challenges for investors is the fact that the recent market jitters are being largely driven by concerns about an economy renowned for its opacity.
There is no doubt that China's economic outlook has darkened, but what's really going on in the world's second-biggest economy? Who knows.
And markets, so the cliche goes, hate uncertainty.
But Mark Lister, head of private wealth research at Craigs Investment Partners, reckons a fully-fledged bear market remains unlikely in the near-term.
"I don't think we're heading for another 2008-style collapse and the reason is you don't normally see that sort of thing unless you're heading for a recession," he says. "Growth is going to be slow but you're still getting some level of growth and you're still getting corporate earnings that are going up rather than down."
