2Q26 P&C Insurance State of the Industry: Refocusing on Fundamentals

Research evidence excerpt

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M

Foundation

August 19, 2026 04:01 AM GMT

Insurance - Property & Casualty | North America

Morgan Stanley & Co. LLC

Bob Jian Huang

Equity Analyst

2Q26 P&C Insurance State of

the Industry: Refocusing on

Fundamentals

While 2Q26 results showed overall strong margins, with

continued growth deceleration due to intensifying competition,

share price moves did not fully align with fundamentals. With

peak margin and peak growth, we prefer idiosyncratic stories

such as AIZ and brokers that show differentiated growth.

2Q26 earnings were broadly solid, but the underlying industry trajectory

remains largely unchanged. Underwriting profitability remained strong, helped by

mild catastrophe losses and favorable prior-year development, while premium

growth continued to decelerate as competition intensified across both personal and

commercial lines. We continue to see the industry in the early stages of a soft

market, led by softer commercial property and personal lines pricing, with casualty

pricing increasingly uncertain/mixed. Healthy current margins should allow carriers

to absorb these pressures for now, but the key debate heading through 2H26 and

into 2027 remains the same: how quickly pricing and premium growth normalize

Daniel Lee, ACAS

Research Associate

Siddhant Shah

Research Associate

Insurance - Property & Casualty

North America

Industry View

Attractive

Exhibit 1 : Price target changes

Company

Ticker

Reinsurers/Hybrids

ACGL

EG

HG

RNR

Rating

Base Price Target

Prior

New

% Chg

8/18/26

Current

Price

Upside

O

E

$111

$375

$34

$325

$111

$375

$37

$325

0.0%

8.8%

0.0%

$98

$365

$35

$319

13.5%

2.7%

4.9%

2.0%

Primary Carriers

AIG

AIZ

ALL

CB

HIG

IFC

LMND

PGR

SIGI

THG

TRV

WRB

E

O

E

U

E

U

E

$81

$300

$265

$340

$145

$290

$65

$210

$80

$235

$330

$75

$81

$320

$265

$360

$145

$290

$56

$210

$80

$240

$330

$75

0.0%

6.7%

0.0%

5.9%

0.0%

(13.8%)

0.0%

2.1%

0.0%

$76

$281

$258

$341

$137

$264

$50

$204

$92

$222

$365

$70

6.8%

13.8%

2.7%

5.6%

6.1%

9.9%

12.1%

3.0%

(13.1%)

8.1%

(9.5%)

7.5%

Specialty/E&S Carriers

BOW

KNSL

SLDE

E

$30

$345

$22

$34

$390

$22

13.3%

13.0%

0.0%

$33

$367

$22

1.6%

6.2%

1.9%

Ins. Brokers/MGAs

AON

AJG

ARX

BRO

MRSH

NP

…