Evercore’s latest sector review finds property and casualty insurers and brokers confronting a period of tightening margins as the industry moves toward the second half of 2026. The note, authored by analyst David Motemaden, argues that although a number of firms are currently overearning and may see returns trend lower, there remains measurable dispersion across the group that creates opportunities for select companies.
Motemaden points to persistent pricing pressure across both commercial and personal lines, but says that relative strength in particular franchises and targeted growth drivers could allow some stocks to outperform even as sectorwide returns compress.
Aon (NYSE:AON)
At the top of Evercore’s list is Aon. The analyst highlights several organic growth contributors that could underpin outperformance. Ongoing momentum in producer hiring is expected to add roughly 1 percentage point to organic growth in both 2026 and 2027. In addition, the buildout of datacenters should contribute another percentage point to client and revenue solutions, while robust transactional risk placements driven by strong capital markets activity could add an additional 1 to 2 percentage points.
Combining those levers, Motemaden models 6% organic growth in client and revenue solutions for 2026-2027, a pace that exceeds the 4% implied by Evercore’s simulated model based purely on macro assumptions. Evercore also notes that Aon’s Commercial Risk business recently delivered 7% organic growth, and the company has attracted both upward and downward revisions to price targets from different brokers - with Keefe, Bruyette & Woods raising its target while BofA Securities trimmed its target.
Arthur J. Gallagher & Co. (NYSE:AJG)
Evercore views Arthur J. Gallagher & Co. as a broker whose recent underperformance appears disproportionate relative to its underlying fundamentals. Historical trends show that AJG has been a consistent market-share gainer among brokers, with share gains averaging the equivalent of roughly 3 percentage points per year over the past decade. Those gains substantiate Evercore’s expectation of about 5% organic growth over the next three years, even in a negative pricing environment.
At 17 times price-to-free cash flow, Evercore argues the stock currently reflects less than 4% organic growth, in contrast to the 5% suggested by its simulated model. Additional upside factors for AJG cited by Evercore include synergies from Acordia Primary and potential revenue benefits within wholesale channels. Jefferies has upgraded AJG to Buy, and the company has announced several acquisitions, including environmental broker Twin Elms and program administrator McKee Risk Management.
Progressive Corp. (NYSE:PGR)
Evercore is becoming more constructive on Progressive as well, particularly within personal lines. The analyst expects growth in auto policies in force to stabilize at levels above consensus, while improving bundling momentum in the second half of 2026 and in 2027 could provide an incremental 1 to 2 percentage points of net premiums written growth.
Progressive currently trades at 14 times normalized earnings compared with a 16 times long-term average, and Evercore expects share gains to be supported by an advertising-spend advantage estimated at about $6 billion versus a roughly $3 billion potential at a key competitor, GEICO. The firm also cites Progressive’s scale in data as a means to advance pricing sophistication.
In reported results, Progressive said April net income rose 10% to $1,087 million and that net premiums written increased by 6%. The company has seen price target reductions from BofA Securities and BMO Capital.
Overall takeaway
Evercore’s note frames the P&C sector as one where margin compression is broadly likely, but where dispersion across franchises has opened pockets of relative value. Motemaden’s work narrows focus to firms with identifiable organic growth drivers, market-share momentum or durable competitive advantages that could allow them to fare better than peers as pricing headwinds persist.