ALL THE TIME.
Comprised of 15 analysts, our Equity Research team is in constant contact with management of both public and private companies to keep our clients abreast of industry trends and new developments. Our boutique model of “all insurance, all the time” allows our dedicated five person sales team to respond to our client’s needs quickly and provide timely access to senior research analysts.
Group Insurance and Employee Benefits Review
Within the US Life Ins Industry, we continue to favor Group Ins & Employee Benefits business given the attractive risk/return profile & strong cash flow generation. Additionally, favorable secular trends will support stronger top-line growth prospects for Group Ins & Employee Benefits providers. 1) the tight employement market & the robust business senitment will drive higher wages & more employee benefits. 2) the shift of employee benefits towards a defined contribution model will lead to a growing demand for supplemental & voluntary benefit products. We argue the companies best positioned are those that focus on small mid case market and/or supplemental & voluntary benefits. See our full Group Insurance & Employee Benefits Review.
2017 P/C U.S. Industry Reserves Continue to Erode Toward/Into Deficiency
Industry loss reserves appeared noticeably weaker in our analysis of the 2017 Schedule P, continuing the trends observed in last year's analysis, but with further erosion in the major long tail lines = a continuation of the "cheating phase". By line trends were mixed and the major lines remain "out of phase". Overall, the US reserves look about adequate but weaker than last year, with an increased likelihood of ultimately proving deficient. See IBNR #11, 2018.
Private MI Primer 2.0
The recent revisions to PMIERs are a strong reminder of the improvements that have been made & oversight that has been added to the private MI industry since the Great Recession. It is a stronger business model with much more inherent loss & ROE stability. Whereas the industry's cross-the-cycle return profile appeared to be 0% or negative from inception through the credit crisis, we now believe it could prove definitively positive. In our opinion, this improves the value proposition of the MI business & provides a stronger foundation for an investment in the group. See our full primer for a review of the changes since 2010.