Insurance - Closer Look at Lines Driving P&C Underscores Competitive Pressure Ahead of 2Q

Research evidence excerpt

Insurance - Closer Look at Lines Driving P&C Underscores Competitive Pressure Ahead of 2Q

Truist Securities

Equity Research Report June 26, 2026

FINANCIALS: Insurance

Insurance - Closer Look at Lines Driving

P&C Underscores Competitive Pressure Mark Hughes, CFA

615-748-4422 Ahead of 2Q Mark.Hughes@truist.com

In earlier notes we evaluated the direct underwriting performance of the industry as a

whole and of specific carriers. Here, we widen the analysis to consider direct premium

Maxwell Fritscher written growth and reserve adequacy, with focus on the longer-tail casualty lines.

404-439-9753 Noteworthy to us is the deterioration in 1Q on most every front in premium growth Maxwell.Fritscher@truist.com

and underwriting profitability even as reserve adequacy – measured using annual

data – started 2026 in worse shape compared to the prior year. Together, this implies

15 Page Document competitive pressure that should represent a headwind for both top and bottom-line

performance, we judge.

Reasons for this report

The question is, “When will P&C pricing inflect?” P&C stocks have caught a little

✓ Sector Update tailwind recently but still underperformed the market, particularly the brokers and the

smaller, growthier carriers. We believe the detail in this note provides useful context

in considering the outlook for the key property and casualty lines; our approach is

to combine: 1) quarterly direct underwriting profit by line industrywide; 2) quarterly

premium growth; 3) historical reserve development through 4Q25 (presented as a

quarterly average); 4) reserve adequacy measures at the start of the year; and 5)

updated pricing indicators.

Our takeaway is cautious because property is too profitable and casualty

dysfunctional (seemingly).