(Bloomberg) -- The worst hurricane season in modern U.S. history is starting to look like a blip on the charts of insurance stocks, with investors banking on a quick restoration of capital as firms rediscover pricing power. It’s a fantasy, some analysts say.
|Enthusiasm may not come to fruition
Property-and-casualty stocks took a quick dip after Harvey and Irma hit parts of the U.S. and the Caribbean islands, but quickly bounced back and resumed their ascent after storm fears abated. Bulls appear to be convinced the industry is being thrust into something known as a “hard market,” in which there’s a cyclical increase in premiums that allows firms to replenish reserves.
These hopes, which have been fueled by enthusiastic commentary from industry executives, may not come to fruition, analysts say.
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