Personal Line Carriers Expected to Post Strong Underwriting in 2026, Morgan Stanley Says

Personal line carriers such as Progressive (PGR) and Travelers (TRV) are positioned to report strong, underwriting in 2026 and portions of 2027, before a more meaningful loss ratio deterioration in 2028, Morgan Stanley said in a Wednesday note. Favorable trends from tort reforms and slower physical damage growth are expected to continue through 2026 and 2027 after supporting 2024 and 2025 personal auto insurance losses, the investment firm said. The insurance companies expected to benefit include Allstate (ALL), Hartford Insurance Group (HIG) and Hanover Insurance (THG), according to the note. Inflation and lower pricing should also drive losses for personal auto insurance and extend profitability, the brokerage added. Loss deterioration, however, is likely to be moderate amid better management of social inflation and as earned pricing takes time, Morgan Stanley noted. Morgan Stanley raised its price targets on Travelers to $333 from $330 and to $225 from $220 for Hanover Insurance, with an equal-weight rating for both. Price: $236.34, Change: $+1.94, Percent Change: +0.83%