Seeking Alpha

Sandler turns cautious on P&C insurers

  • The property-casualty insurance cycle is "petering out," says the team, noting "outright softening" in reinsurance pricing, a leveling out in commercial-insurance price gains, decelerating personal line pricing, and flat auto-insurance prices (home-insurance prices remain on the rise).
  • Still, Sandler's Q3 estimates remain above consensus, mostly because of the lack of catastrophe losses, and the firm has Buy ratings on ACE, AIG, ALL, TRV, and XL.
  • American Financial (AFG -0.7%) is downgraded to Hold - a valuation call after a big run has the stock near Sandler's $58 price target.
  • Price targets on ProAssurance (PRA -1.3%) and State Auto Financial (STFC -0.5%) are cut $2 to $47 and $1 to $20, respectively.
  • Relevant ETFs: KIE, IAK, KBWP, KBWI.
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