Insurance Proxy Filings Deep Dive: Follow The Incentives

Research evidence excerpt

Insurance Proxy Filings Deep Dive: Follow The Incentives

May 14, 2026

Investment Conclusion

Commercial Insurance Investment Case: We maintain our Commercial Insurance sub-sector Market Weight rating.

Pricing has slowed significantly, growth prospects are declining, but returns are still healthy and underwriters

should still produce mid-teens ROE’s. Our cautious stance on casualty insurance is also a dominant theme on our

rating.

Valuation (Commercial): Commercial insurers shares trade at 10.3x median '27E P/E consensus, which is a

premium to 1Y average of 9.2x, in line with 5Y average of 10.3x and a discount to 10Y average of 11.1x.

Personal Insurance Investment Case: We maintain our Personal Insurance sub-sector Market Weight rating. We

think personal auto profitability has peaked following years of compounding rate increases and normalizing loss

cost trends. Industry-wide profitability is still strong, and we expect companies to pursue growth by cutting prices,

which should drive downward pressure on price, and thus margins. We’re also cautious on homeowners’ insurance

given the exposure to all weather-related events, although we acknowledge that rate increases are still healthy.

Valuation (Personal): Personal insurers trade at 8.7x median '27E P/E consensus, which is a discount to the 1Y, 5Y,

and 10Y averages of 9.2x, 9.9x, and 12.3x.

Insurance Brokers Investment Case: We maintain our Insurance Broker sub-sector Market Weight rating. We can

be more constructive on brokers if we see a period of cleaner, more stable, organic revenue growth prints. However

pricing pressures remain a headwind. We view M&A potential as a positive (if accretive) and think that mid-single

digit organic growth and modest margin expansion is good enough to warrant a neutral view.