Commercial Insurers Continue Exhibiting a Very Strong Pricing Improvement: Learn Which of These Financial Stocks is Expected to See the Most Upside in this Exclusive Wall Street Transcript Interview

Wall Street Transcript

67 WALL STREET, New York - June 11, 2013 - The Wall Street Transcript has just published its Insurance Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Low Profitability and Low Interest Rates - Commercial Line Brokers and Underwriters - Consolidation Trends - Emerging Market Expansion - Analysis Of Personal, Commercial & Reinsurance Subsectors

Companies include: The Travelers Companies, Inc. (TRV), ACE Limited (ACE), Argo Group International Holdi (AGII), Employers Holdings, Inc. (EIG) and many more.

In the following excerpt from the Insurance Report, an expert analyst discusses the outlook for the sector for investors:

TWST: While we're on the topic of stocks that you like, is there another one or two from you group, since it's fairly large, that you're recommending for this year?

Mr. Kumar: I would mention two other names. One would be Argo Group (AGII). Again, it's a specialty insurance play, it trades at meaningful discount to book, it has a mid-single-digit ROE. Recently, we were on the road with Argo Group management, and if you look at some of the road maps they have laid down, the ROEs for Argo Group could reach close to double-digit or slightly lower by 2015. If that is the case, the stock will start trading a bit more in line with some of the peers. Currently, Argo is trading at the one of the biggest discounts to book value in the entire P&C space. So that's Argo Group.

The other name that I would mention is Employers Insurance Group (EIG). It's a workers' compensation specialist. That's more so on the, I would say, smaller-cap side. Again, the biggest draw with that name is workers' compensation market conditions have improved. They're getting double-digit rate increases. The loss cost trends have stabilized.

If you go back to 2011, that was a time when there was a lot of debate if this line, which is workers' compensation line - with the performers in this line sort of blow up. Our analysis of the industry shows us that that is not the case. Recently we did a full industry analysis and walked away with increasing confidence on this line, so in my mind, if you're looking at the pricing, if you're looking at the loss cost trends and then you look at where the stock is trading at and our runoff value analysis, you can see that there is a meaningful upside to Employers Insurance Group. The other thing I would point out is...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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