Goldman changes ratings across P&C insurance sector

Travelers (TRV) is cut to Neutral: "Over the past two years, TRV has been a bellwether in pushing for commercial lines rate, and has improved underlying margins an impressive 6pts from 2011 levels," says analyst Michael Nannizzi, but he notes the stock trades at 1.3x book vs. 0.8x in 2011. "The case for multiple expansion is increasingly difficult."

W.R. Berkely (WRB) is cut to Sell: "We believe that WRB's higher valuation appears ahead of fundamentals in a market where positive trends may be plateauing," says Nannizzi.

Progressive (PGR) is upped to Neutral: Re-emerging growth is a positive catalyst while margins remain within an acceptable range, says Nannizzi. "Over the past year, Progressive, faced with signs of accelerating loss costs, raised pricing, and as a result unit growth declined. As a result of the firm's rate action profitability improved in 2013, and in recent months, running below the firm’s 96 CR target, PGR is no longer aggressively seeking rate increases."

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