Americas Insurance: Property & Casualty: Updating PGR/ALL Views Post May Results

Research evidence excerpt

Americas Insurance: Property & Casualty: Updating PGR/ALL Views Post May Results

Goldman Sachs Americas Insurance: Property & Casualty

PGR

Following PGR monthly results, our EPS estimate for 2026 increases by 5%, while

our 2027/2028 EPS estimates increase by <1%. The earnings revisions primarily reflect

the strong EPS beat in the month, as well as the impact of modestly stronger-than

expected monthly growth in invested assets on net investment income in the out-years.

We have carried forward a small proportion of the strong May margins into our

estimates for the next few quarters, but largely keep our margin expectations stable.

Despite a modest beat on PIF in the month, we have modestly decreased our

expectation for 2026 PIF growth, as we consider the relatively significant level of

deterioration in Direct Channel Advertising Spend efficiency (New Direct PIF per Dollar

of Advertising Spend) in 2Q26 QTD, relative to 1Q26. Despite modestly lower PIF

expectations, our NPW growth estimates are largely unchanged, as stronger growth in

Commercial Auto offsets modestly weaker expectations in Personal Auto. On a

high-level, PGR continues to stand out in the increasingly competitive P&C

Insurance market, as a company that can drive market share gains to deliver

mid-single digit growth against a negative pricing backdrop. Additionally, we believe

PGR remains positioned to continue to beat Consensus combined ratio expectations in

the near-term (partially driven by underappreciated impacts of Tort Reform), which

provide support for our expectation of materially above-street capital deployment.

We maintain our Buy rating and increase our price target by $5 (2%) to $219 (13%

upside).

Exhibit 2: ALL Old vs. New

2025 2Q26E 2026E 2027E 2028E

ALL Actual GSe Old GSe New Cons.