“As property and casualty companies write insurance and invest primarily in fixed income... (they) have little fundamental exposure to volatile equity markets,” the brokerage said in a note to clients.
Exposure to regulatory risk, debt financing risk, Europe sovereign risk is low, the brokerage said.
Goldman also noted eight of the ten underwriters it covers are paying dividends in excess of the 10-year Treasury.
Goldman upgraded Travelers to “buy” from “sell” and said the company should see improving pricing trends earlier than most of its peers. It raised its price target on Travelers stock by $10 to $63.
The brokerage sees ACE Ltd. and XL Group benefiting from better pricing in property-catastrophe and maintained its buy-rating on both the stocks.
Goldman increased its price target on ACE to $79 from $75 and XL Group by $1 to $26.
The brokerage also increased its price target on Chubb Corp, HCC Insurance and W R Berkley.
