Zacks Industry Outlook Highlights: Phoenix Companies and ProAssurance - Press Releases

By Zacks Equity Research,

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For Immediate Release

Chicago, IL - February 13, 2012 - Today, Zacks Equity Research discusses the Insurance Industry, including Phoenix Companies, Inc.  ( PNX ) and ProAssurance Corporation  ( PRA ).

A synopsis of today's Industry Outlook is presented below. The full article can be read at


The impact of a series of natural disasters in 2011 and the ongoing economic uncertainty is still quite palpable in the performance of U.S. insurers. These impediments aside, there are fundamental challenges that are expected to come in the way insurers' efforts to meet growing investor expectations in the upcoming quarters. Among the possible way outs of such difficulties, rising rates and pricing flexibility are primary.

The overall health of the U.S. insurance industry has improved to some extent in the recent quarters, after enduring pricing pressures and reduced insured exposure for quite some time. The market turmoil resulting from the Great Recession forced many companies to take immense write-downs, but those memories are fast becoming a thing of the past.

That said, continued soft market conditions, shrinking businesses, a still-high unemployment rate, uncertain fiscal policy and legislative challenges are threatening insurers' ability to rebound to the historical growth rate. The industry continues to be challenged by subdued premium volume growth in a perked up economy as well as a massive healthcare restructuring.

Though there are signs of economic recovery, its sluggish pace is expected to continue at least through the first half of 2012. Also, structural economies of scale have pushed the industry toward consolidation. As a result, inter-segment competition within the industry has alleviated. Moving forward, maintaining profitability after complying with regulatory requirements could be a painful task.

We expect static growth from persistent soft market conditions to result in further consolidation in the industry. Though there are near-term opportunities for insurers, braced by some rapidly growing sectors such as health care and technology, overall industry conditions are expected to improve beyond the first half of 2012, should the economy turn to growth post-recovery. Probably, the industry would take a couple of years to overcome most industry challenges with the help of an improved market mechanism.

We remain positive on  Phoenix Companies, Inc.  ( PNX ) and  ProAssurance Corporation  ( PRA ) with a Zacks #1 Rank (short-term Strong Buy).

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PHOENIX CMPNIES ( PNX ): Free Stock Analysis Report
PROASSURANCE CP ( PRA ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: PNX , PRA

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