Industry Data Supports Signs of Peak Cycle

Research evidence excerpt

Industry Data Supports Signs of Peak Cycle

I N D U S T R Y N O T E

J u n e 1 5 , 2 0 2 6

Insurance

CONCLUSION Paul Newsome, CFA, CPCU

While doing a data pull for a client we found some interesting trends in the overall insurance Managing Director, Piper Sandler & Co.

industry. We think the data shows that the U.S. P&C insurance industry continues to 312 281-3445, paul.newsome@psc.com

demonstrate strong underlying profitability, with combined ratios and ROEs reflecting the Cam Bianchi

benefits of several years of disciplined underwriting and rate adequacy. While commercial Research Analyst, Piper Sandler & Co.

612 456-9841, cam.bianchi@psc.comlines pricing is moderating, which is consistent with themes of a softening market, loss ratio

trends remain favorable across most lines, and large insurers are generating returns higher

Related Companies: Share Price:

than what we have seen in the last decade. We view the current environment as supportive HRTG 22.45

for our Overweight-rated names with differentiated underwriting capabilities and diversified PLMR 114.85

business mix. SKWD 50.05

INDUSTRY RISKS• Industry NPW Growth is Close to the Long-Term Average. Net premiums written

continue to reflect the cumulative benefit of rate increases earned through books The P/C insurance industry is subject to risks

over the past several years. The pace of top-line growth is beginning to moderate as including catastrophe events, changes in interest

pricing softens in most commercial lines. We expect written premium growth to remain rates and fixed income credit losses, declines

in equity valuations in their investment portfolios positive through 2026, though comparisons will become more challenging as earned

and higher claim costs related to inflation and