Property-Casualty Valuations: Have Valuations Reached a New Equilibrium?


Michael Warner 
Conning, Inc.

Conning—Property-Casualty Industry Valuations Now at Equilibrium  

  --Over capitalized industry unlikely to return to historic valuation highs  

(Hartford, CT) October 7, 2013—Property-casualty insurance stocks have now risen beyond the sub-book-value multiples that existed for many companies over the preceding four years to reach a modest premium to book value. This valuation level appears to be at equilibrium, according to a new study by Conning.

“Current property-casualty industry valuations seem more rational than the sub-book value levels that existed over much of the prior four years,” said Steve Webersen, director of research at Conning. “However, our analysis suggests that a return to the higher historical valuation levels is unlikely in the near term.”

The Conning study, “Property-Casualty Valuations: Have Valuations Reached a New Equilibrium?” provides a review of long-term returns and valuations in the property casualty industry as well as approaches to valuation, total returns and value creation. The study analyzes valuations by subsector and provides rankings based on value creation.

“Yes, underwriting fundamentals have improved, supporting higher valuations, however the build-up of capital and depressed interest rates act as dampers on further improvement,” said Steve Webersen. “Currently, the pendulum has swung to the ‘more capital is better’ side at the expense of returns and ultimately valuations. Until this situation is resolved, the excess capital position will likely act as a ceiling on valuations.”

Property-Casualty Valuations: Have Valuations Reached a New Equilibrium?” is available for purchase from Conning by calling (888) 707-1177 or by visiting the company’s web site at

About Conning  
Conning ( is a leading investment management company for the global insurance industry, with almost $82 billion in assets under management as of June 31, 2013 through Conning, Inc., Conning Asset Management Limited, Cathay Conning Asset Management Limited, and Goodwin Capital Advisers. The company's unique combination of asset management, risk and capital management solutions and insurance research helps clients achieve their financial goals through customized business and investment strategies. Founded in 1912, Conning is focused on the future, providing clients with innovative solutions, leveraging its global capabilities, investment experience, and proprietary research. The company is headquartered in Hartford, Connecticut, with additional offices in Purchase, London, Cologne, and Hong Kong.