For many companies with “pot-committed” strategies with competing capital demands, increased buybacks should be seen as capitulation and a risk to longer term strategy.
The stock price movements of Aon and Willis Towers Watson since their mega-merger was announced suggests investors are proceeding with caution ahead of possible shareholder and regulatory opposition.
Root has has been dependent on private equity and reinsurance – a source of capital in flux given the Covid-19 pandemic – to continue operating at its current growth rate.
As the pandemic unfolds, the mortgage (re)insurance market—a boon to the industry since the last economic crisis—is more exposed to the larger macroeconomic cycle than the traditional P&C business.
“I’m from the government and I’m here to help.” P&C stock movements suggest the market can’t decide if these are the nine most reassuring or the nine most terrifying words in the English language.
