Blair downgrades Chubb, Travelers on ‘structural change’ in casualty

William Blair downgraded Travelers (TRV) to Market Perform from Outperform and Chubb (CB) to Underperform from Market Perform, both without price targets. The casualty side of the insurance business is being hit by rising levels of claims and losses, the analyst tells investors in a research note. The firm says that while the property and casualty industry is known for its ups and downs, its analysis suggests “significant forces driving structural change.” The downgrades of two of the market’s top competitors reflect their large market shares likely creating challenges given a worsening casualty environment, contends William Blair. It believes Travelers’ and Chubb’s earnings growth is “poised to slide” due to a more challenging claims environment and decelerating investment income growth.