P&C insurance stocks have reached an equilibrium after rising past sub-book value multiples, which have existed since 2009 for many companies, according to “Property-Casualty Valuations: Have Valuations Reached a New Equilibrium?” a study from Conning, an investment management company for the global insurance industry.

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

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