2Q results to feature growth & margin headwinds from softening rates

Research evidence excerpt

2Q results to feature growth & margin headwinds from softening rates

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U.S. Insurance

2Q results to feature growth & margin

headwinds from softening rates

Price Objective Change

Some notable cat events in 2Q, exposure below average 15 July 2026

2Q featured several notable cat events globally, including windstorms and flooding in Equity

Asia and the first named storm of the 2026 Atlantic Hurricane season. Nevertheless, we United States

expect below average catastrophe exposure across our coverage. The ongoing Middle Insurance

East conflict remains a potential risk for global reinsurers. Personal lines carriers may be Joshua Shanker

exposed to severe convective storms and other adverse weather events in the Midwest Research Analyst

and Central US. Share repurchases could increase as insurers capitalize on depressed BofAS+1 347 821 9017

valuations, although the sector’s late-quarter stock price recovery may reduce the appeal joshua.shanker@bofa.com

of buybacks. Commentary on capital return priorities will be of interest to investors. Cyril Onyango

Research Analyst

BofAS

cyril.onyango@bofa.comP&C: moderating premium rates, negative auto CPI

Property rate declines should continue to pressure premium growth and limit Fatima Keita

underwriting margin expansion during the quarter. Casualty lines that still require rate BofAS

(e.g. General Liability) continue seeing healthy rate increases reflecting social and fatima.keita@bofa.com

economic inflation; these may provide support to carrier NWP growth. Meanwhile, May

CPI data showed Auto Insurance CPI declined 2% YoY – the first negative reading since

2021. We believe auto insurance pricing remains adequate and carriers should continue Exhibit 1: PO changes reflect 2Q26