Where Are the Opportunities in P&C Insurers?
Moats and management make the difference.
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.
Brett Horn does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.