Commercial Lines Insurers – An Attractive Economic Recovery Play

Published January 15, 2021

Download the Recent Research

“By completing this form you agree to the processing of your personal information submitted through this form in accordance with CFRA’s Privacy Notice located at and the receipt of communications about CFRA and CFRA’s services.”

Key Takeaways

  • Insurance claims from Covid-19 (estimated at $40-$100 billion) have accelerated and amplified a “turn” in the property-casualty underwriting cycle that was sparked by record catastrophe losses and social inflation. Despite price increases that averaged nearly 12% in the third quarter of 2020, revenue growth remains constrained by the Covid-19 induced recession.

  • An economic recovery combined with a “hard” insurance pricing environment provides the shares of commercial lines property-casualty insurers with a catalyst for outperformance.

  • CFRA views Chubb (CB) as the best positioned commercial lines insurer set to leverage opportunities for global growth, while Alleghany (Y) offers exposure to a stronger reinsurance pricing environment as well. American International Group (AIG) and Hartford Financial Services Group (HIG) are both turnaround/restructuring candidates whose shares now have an additional catalyst of an upturn in property-casualty insurance pricing.