Piper Sandler has upgraded Arthur J. Gallagher to Overweight and downgraded Aon, American International Group, Hartford, Hanover, and Universal Insurance Holdings to Neutral, while revising price targets for 21 companies, as it outlined a new investment strategy for a softening U.S. property and casualty insurance market. The brokerage noted that first-quarter 2026 data showed the first overall decline in commercial property and casualty premiums since 2017, signaling a shift away from broad rate-driven earnings growth toward greater emphasis on underwriting discipline, expense control, and capital allocation. It upgraded Gallagher, citing a nearly 20% share price decline over the past year that created a more attractive entry point despite resilient execution and a strong acquisition pipeline, while downgrading Aon because its operational strength is already reflected in its valuation and slowing fiduciary income and higher interest costs leave limited room for further upside. AIG, Hartford, and Hanover were downgraded as large diversified commercial insurers lose their defensive advantage with pricing softness spreading across more lines, and Universal Insurance was downgraded after a roughly 71% rally over the past year, with benefits from recent benign hurricane seasons now fully reflected in the stock price. Piper Sandler recommends investors initially favor large diversified insurers before rotating into smaller specialty insurers, then personal-lines-focused carriers, and eventually insurance brokers once organic growth stabilizes, believing the market is now transitioning into the second phase where agile specialty insurers may offer the best opportunities.
American International Group Inc
Arthur J Gallagher & Co
Hartford Financial Services Group
Piper Sandler Companies
The Hanover Insurance Group Inc
Universal Insurance Holdings Inc
Aon PLC