Fourth-quarter 2005 results portend challenging times for personal lines insurers, according to a new analysis by Bank of America securities analyst Brian Meredith.
“We expect continued top-line growth pressures and gradual margin compression,” he wrote, noting, “The personal auto insurers have historically underperformed other property-casualty insurers during periods of margin compression.”
Among the companies most at risk for margin compression and ultimately earnings “misses,” he warned, are Allstate, Safeco and Progressive.
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