Cantor rolls out P&C insurance coverage, sees ‘market in transition’

Cantor Fitzgerald initiated coverage of 19 stocks in the property and casualty insurance space, telling investors that Q2 earnings were “a clear sign” that the hard market is finally transitioning after seven years of favorable P&C pricing. In commercial lines, the analyst tells investors to be selective and has Overweight ratings on Hartford (HIG), Travelers (TRV) and W. R. Berkley (WRB). In terms of insurance brokers, which the analyst sees being “far less impacted” by a softer market, the firm has Overweight ratings on AJ Gallager (AJG), AON (AON) and Marsh McLennan (MMC). In personal lines, the firm anticipates “late soft” market conditions over the next 12 months, including a lot of competition and “everyone struggling to meet growth expectations.” In this sub-sector, the firm has Overweight ratings on Lemonade (LMND) and Goosehead (GSHD). In terms of Bermuda insurers, the firm argues that “too much hinges on wind season,” where substantial activity is needed to reverse softer pricing trends. The firm has Neutral ratings on Arch Capital (ACGL), Everest (EG) and RenaissanceRe (RNR).