SECTOR PERFORMANCE UPDATE
Mixed Quarter for Insurance Stocks as Broker and P&C Multiples Compress
Insurance stocks posted mixed results in the third quarter of 2026. Life & Annuities (+4.1%) and InsurTech (+2.8%) outperformed the S&P 500 (+2.3%), while Brokers (-2.2%), Standard P&C (-3.7%), Specialty P&C (-5.6%), and Managed Care (-7.4%) declined.
Broker share prices and valuation multiples generally declined, reflecting continued concern about slowing organic growth. The median multiple of forward EBITDA fell from 13.3x to 12.3x, returning to its first-quarter level.
P&C underwriter valuations also declined, despite continued underwriting profitability. Median forward price/earnings multiples fell from 13.4x to 12.8x for Specialty P&C and from 10.9x to 9.7x for Standard P&C. Median combined ratios remained favorable at 89.5% and 91.2%, respectively.
Rising interest rates proved favorable to life and annuities underwriters, while the Insurtech segment was buoyed by take-private news for CCC Intelligent Solutions in mid-July and Accelerant in mid-August. Despite the quarterly improvement, the Insurtech segment’s market-cap-weighted index remains approximately 26% below its level a year earlier.
Managed Care recorded the largest quarterly decline among the tracked insurance segments. UnitedHealth, the group’s largest constituent, fell approximately 12% in response to concerns about medical cost trends and contracting enrollment numbers.
In broker M&A, the quarter saw two major transactions: Aon’s $17 billion acquisition of USI from KKR, expanding its U.S. middle-market presence, and Baldwin Insurance Group’s $7.7 billion take-private transaction. The deals implied multiples of approximately 14.5x (including anticipated synergies) and 17.3x trailing adjusted EBITDA, respectively.
Two significant underwriter transactions included the $1.2 billion acquisition of specialty P&C underwriter Bowhead Specialty by American Family Insurance (~2.4x book value) and the $1.54 billion acquisition of New England-based Safety Insurance by MAPFRE (~1.8x book value).