Say No To Trading
Public Markets Investor, Opportunistic Buying & Cost-Basis Management
High-quality insurers and brokers such as Arthur J. Gallagher, Brown & Brown, Kinsale and Progressive benefit as insurance rates soar. KTLA reports Southern California homeowners struggling to afford rising premiums; owning these companies is a way to join them and earn back what policyholders pay. x.com
AI agents pushing more drivers to shop their auto insurance favor Progressive and hurt Allstate, so the two should not trade as one consumer-inertia package. Per JD Power/TransUnion, 12.6% of drivers shopped in Q2 and 4.5% switched; the roughly 87% who never shop fund a loyalty tax of renewals priced above new-customer rates. JD Power found shoppers using AI tools over 1.3x likelier to switch. Progressive's direct book, built for price shoppers, grew 14% to 16.0M policies in 2025. x.com
Progressive's durable AI-era edges would be proprietary data for pricing risk and underwriting discipline, since AI also brings real risks to insurers. Autonomous vehicles could cut accidents and policy prices; widely available AI could intensify competition and, at pricing-accuracy parity, spark a race to the bottom. More accurate pricing shrinks premiums and float, cutting investment income, and agentic shopping eases price comparison. Progressive trades at about 10x GAAP net income. x.com
Kinsale Capital's margin beat may mark the bottom for beaten-up insurance stocks. Although its underwriting has historically not been best in class, it knocked margins out of the park this quarter despite gross written premiums falling 5% year over year, leaving sell-side analysts and shorts in shambles. x.com
These 12 stocks are quality compounders sharing pricing power, recurring demand, strong returns on capital and disciplined management. Domino's earns royalties, AutoZone serves an aging fleet, Progressive underwrites with data, Waste Management owns routes and landfills, Grainger is embedded in operations, S&P Global and FICO are mission-critical, Rollins has recurring pest control, Copart an auction network, Visa a fee network, HEICO niche aerospace parts, Costco loyal members. x.com x.com … Show more
Kinsale Capital trades at 15.8x forward earnings after a roughly 38% drawdown. x.com
EverQuote is an insurance lead-generation middleman in a cyclical business during unpredictable times, with a potential threat if LLMs like GPT start connecting people directly to the best quotes. The financials are better than expected: strong revenue growth, gross profit outpacing operating expenses and booming free cash flow, though growth slowed. Technically, support sits near $14 and resistance near $25. Despite the good financials, the long-term idea does not appeal. x.com
Brown & Brown carries downside risk but not structural impairment, because its moat is much broader than a talent dispute. A post the author replies to warns its valuation could fall 80% if it loses its Howden lawsuit. Yet a decentralized culture keeps producers in place, client relationships don't walk overnight, scale aids distribution and carrier access, and its acquisition engine keeps adding talent and revenue. It remains a relationship-driven, recurring-revenue business with high renewals. … Show more
Property and casualty insurers such as W.R. Berkley should benefit as rates stay higher for longer, because their short-duration insurance float reprices higher, as in the 2022 hiking cycle. The Fed just hiked for the first time in over three years, while drone strikes shut Saudi Arabia's Petroline, which moved about 4 million barrels a day, sending Brent up 8.7% to $104.61 and the 10-year yield to 4.97%. That is a structural repricing of energy risk, and rate-cut bets will get run over. x.com
Markel looks attractive at this price, with 15-20% yearly EPS growth possible. That needs a better insurance combined ratio, a return to premium growth, a cyclical recovery in ventures and a mid-single-digit yearly fall in share count; delivering it would expand the multiple. Repeating the last five years still gives a 10-12% downside case. In a breakup, moving equities into fixed income after taxes could free about $8B of excess capital to pay out, plus ventures and the remaining insurer. x.com … Show more
RLI's investment income keeps rising as it rolls 1% bonds into 5.3% bonds, lifting the risk-free yield on its portfolio every day, yet the stock is trading down. Its $250M buyback would also save more than $12M in dividend payments, funding future increases. x.com
