Jefferies analyst Andrew Andersen initiated coverage of property and casualty insurers Kinsale Capital Group ( NYSE: KNSL ) and Palomar Holdings ( NASDAQ: PLMR ) with a Hold rating, as growth in the U.S. excess and surplus insurance market is expected to slow from recent highs, but remain above market.
For Palomar ( PLMR ), which has seen its stock dip 2% in late morning trading, Andersen sees lower 2023 growth in the company's gross written premiums than the more favorable Wall Street consensus, as it's "targeting expansion within the competitive E&S market (in which it does not have a track record)," he wrote in a note.
See why Seeking Alpha contributor Peter F. Way, meanwhile, viewed PLMR as a Buy .
Kinsale ( KNSL ), up 0.3% , is seen to post above commercial P&C peer growth, the analyst noted. But with shares trading at ~8.5x price-to-book excluding accumulated other comprehensive income, "we believe KNSL shares already reflect stronger growth/margins and lower volatility compared to peers," he added. In essence, there's still room for the company to grow, but "valuation is demanding."
Fellow SA contributor Weighing Machine justified KNSL with a Sell rating , calling it "the most expensive insurance company I have ever encountered."
Check out the Quant system's screener of the best-rated U.S. P&C insurers, with W. R. Berkley ( WRB ) topping the list.
For further details see:
Kinsale, Palomar rated Hold as Jefferies starts coverage of P&C insurers