Where Are the Opportunities in P&C Insurers?
Moats and management make the difference.
Stock Strategist Industry Reports
Mentioned: Fairfax Financial Holdings Ltd (FFH)
, Berkshire Hathaway Inc (BRK.A)
, Allstate Corp (ALL)
, WR Berkley Corp (WRB)
, Markel Corp (MKL)
, Progressive Corp (PGR)
, The Travelers Companies Inc (TRV)
, Berkshire Hathaway Inc (BRK.B)
, Chubb Ltd (CB)
In our view, property and casualty insurance is at its heart a commodity industry in which it’s difficult to achieve sustainable excess returns. But some insurers clearly stand out, and the relatively wide spread of price/book multiples suggests a fairly large difference in franchise quality across the industry. We think having a grasp on the strength of a company’s competitive advantage and potential long-term returns is a necessary first step to gauge whether current market multiples reflect a proper valuation.
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Brett Horn does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.