PARIS (Bloomberg) — European insurance shares including Axa SA were raised to “overweight” by analysts at Merrill Lynch & Co. who cited “negligible” risk for them from US subprime lending.Shares of European insurers were raised from “neutral” by analysts led by Brian Shea at Merrill in London, in a note to investors today. Shares in Axa, Europe’s second-biggest insurer, jumped 1.13 euros, or 3.7 percent, to 31.73 euros as of 10.58 a.m. in Paris, making the company the biggest gainer on the 29- member Bloomberg Europe 500 Insurance Index. The broader measure added 1.8 percent.

Shares of financial stocks have declined over the past month amid concern that loans to US subprime mortgage lenders will hurt earnings. Subprime borrowers, those with poor or limited credit histories, have increasingly been defaulting as they face higher interest payments and falling home prices in the US.

“Insurers are usually a soft target when it comes to investor concern about credit risk,” Shea wrote in the note.

“Our investigation, however, yields no warning flags with respect to US subprime exposure. Direct exposure to the US subprime market appears to be de minimus.”