Credit Suisse Sees Opportunity In 'Soft' P&C Insurance Space

In a new report, analysts at Credit Suisse took an in-depth look at the property and casualty (P&C) insurance business and initiated coverage on several names in the space.

Here's a breakdown of what they had to say.

Soft Market

Analysts also predict average return on equity of 12 percent for the group in the next two years.

Defensive, Value-Driven Trading

While analysts see few business-related catalysts on the horizon to boost share prices in the near-term, they believe that several names in the space offer buying opportunities on other grounds. Analysts predict that excess capital on the balance sheets of many P&C insurers will continue to be returned to shareholders.

Related Link: Patriot National Acquires Trigen Insurance Solutions

According to the report, maintenance of current capital return levels (70 to 130 percent of operating earnings) will continue to be a "key value driver" for stocks.

Stock Picks

Credit Suisse assigned an Outperform rating on the following stocks:

• Allstate Corp ALL
• Chubb Corp CB
• XL Group plc XL
• ACE Limited ACE
• Arthur J. Gallagher & Co. AJG
• Marsh & McLennan Companies, Inc. MMC

Credit Suisse issued Neutral ratings on these names:

• Travelers Companies Inc TRV
• Arch Capital Group Ltd. ACGL
• Progressive Corp PGR
• Willis Group Holdings PLC WSH

Credit Suisse initiated the following two names at Underperform:

• Aon Plc AON
• W.R. Berkley Corp WRB