BarclayscapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Pleaseseeanalystcertificationsandimportantdisclosuresbeginningonpage183.u.s.Insurance/Non-LifeTheLongView:P&CRe/InsuranceMarketConditionsImprovingThisreportisdesignedtoprovidecontext,analysisandinsightonkeydriversoftheproperty-casualtyinsuranceindustryandthecompanies.Weprovideadeep-diveperspectiveonindustrytrendsandprojectionsinPartI-VI.ThecompanysectionsprovidesummaryanalysisofmajorissuesfortheP&Cstockswecoverincludingfundamental,quantitative,andvaluationtrends.EquityResearch15April2019U.S.Insurance/Non-LifeJayGelb,CFA+12125261561jay.gelb@barclays.comBcI,ussueLee+12125268190sue.lee@barclays.comBcI,usAndrewKarp+12125269015andrew.karp@barclays.comBcI,usFocusBarclays|USInsurance/Non-Life15April20192TheLongView:P&CRe/InsuranceMarketConditionsImprovingProperty-CasualtyInsuranceIndustryConditionsImproving.Followingtheworsttwo-yearperiodofinsuredcatastrophelossesonrecord,commercialP&Cre/insurancepricesarerising,andweexpectthistrendtopersist.Thisfactor,alongwithasustainedeconomicrecoveryandstabilizingcoreunderwritingmarginsandmodestlyrisinginvestmentincomeshouldimprovenormalizedearningspowerformostP&Cre/insurers.Althoughthereisstillplentyofexcesscapital,weexpectsustainedpositivepricingmomentumincommercialP&Candreinsuranceresultingfromoutsizedcatastrophelossesandthegrowingconsensusthatthissituationcouldbethenewnormal.Longterm,theglobalP&Cinsuranceindustryneedstotakeintoaccountthepotentialforoutsizednaturaldisastersaswellascyberevents,inourview.Thetailwindofreservereleases,whichhaslastedforadozenyears,appearslikelytopersistbasedonlowoverallinflation,whichcouldresultinsomewhatlessneedforpriceimprovementincertainP&Clines.Wesaidayearagothattheperformancegapbetweenstrongandweaku...
