latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/p-c-stocks-slide-as-wildfires-scorch-west-reinsurance-stocks-mixed-60249994 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

P&C stocks slide as wildfires scorch West; reinsurance stocks mixed

Infrastructure Issues: Tools to Dig Deep on Potential Risks

Part Two IFRS 9 Blog Series: The Need to Upgrade Analytical Tools

2018 US Property Casualty Insurance Market Report

Fintech

Fintech Funding Flows To Insurtech In February


P&C stocks slide as wildfires scorch West; reinsurance stocks mixed

Historically large wildfires continued to burn throughout California and Oregon in a week that saw property and casualty insurance stocks mostly move lower.

Insurance stocks tracked closed to the broader market as the S&P 500 fell 2.51% to 3,340.97 for the week ending Sept. 11, while the SNL U.S. Insurance Index declined 2.42% to finish at 1,052.37.

Piper Sandler analyst Paul Newsome said higher levels of catastrophe losses will have an impact on the P&C space and tend to push stock prices down.

"It's not just the wildfires, you've got Hurricane Laura activity that's getting resolved and a number of other storms all over the Midwest," Newsome said. "Companies have been saying this week in general that it looks like it's going to be an above average third quarter."

Although there have been a large number of catastrophe events and claims this season, Newsome noted that many insurers have been more conservative with their underwriting this year in wildfire-exposed areas.

"You're not really seeing the enormous losses that you might have feared given what the wildfire and hurricane level of losses was," Newsome said.

The Piper Sandler analyst said expects to see some level of wildfire losses from large home insurers like Allstate Corp., Travelers Cos. Inc., Chubb Ltd. and Hartford Financial Services Group Inc., among others.

Allstate shares were essentially flat this week, while Travelers slipped 2.72%. Chubb dropped 3.89%, and The Hartford found a spot among the biggest losers with a decline of 5.62%.

Arch Capital Group Ltd.'s shares lost 3.58% in the same week it was reported that it is leading a consortium to acquire Watford Holdings Ltd. for approximately $500 million.

SNL Image

Two major rating agencies signaled a return to profitability for reinsurers and a rise in pricing for the sector come 2021.

S&P Global Ratings said it expects the sector will have a double-digit return on equity in 2021, although it also said losses from the pandemic and catastrophe events could change the outlook in coming months. Meanwhile, Moody's said most property and casualty reinsurance buyers that responded to a survey it conducted expect reinsurance prices to increase by at least 5% in 2021, if not more.

The sector's stocks were a mixed bag this week.

Reinsurance Group of America Inc. was among the biggest winners with an increase of 5.57%. RenaissanceRe Holdings Ltd. and Everest Re Group Ltd., on the other hand, ended the week in the red, with decreases of 3.37% and 4.27%, respectively.

Third Point Reinsurance Ltd.'s stock lost 4.59% in the same week it announced it has entered a $260 million deal with holders of Sirius International Insurance Group Ltd.'s series B preference shares in which they remain as investors in the combined company upon completion of the proposed merger between the two entities.

Many managed care insurers saw their stocks lose ground. Molina Healthcare Inc., Centene Corp. and Humana Inc. shares fell 7.74%, 5.41% and 5.28%, respectively.

Cigna Corp. said this week that the coronavirus pandemic has slowed the approval process for the sale of its U.S. group disability and life business to New York Life, and has moved the expected time of completion to the fourth quarter.

Cigna's stock lost 5.18%.