Overview

Evercore analyst David Motemaden notes that the property‑and‑casualty (P&C) insurance sector is experiencing margin compression as it moves into the second half of 2026, but he identifies three insurers that could outperform despite the challenging backdrop.

AON (NYSE:AON)

AON is Evercore’s top pick. The firm expects producer‑hiring momentum to contribute roughly one percentage point (ppt) of organic growth in both 2026 and 2027. A concurrent datacenter build‑out is projected to add another ppt, while robust transactional risk placements driven by strong capital‑markets activity could contribute an additional 1‑2 ppt. Motemaden’s model therefore forecasts 6 % client‑ and revenue‑solutions organic growth for 2026‑27, compared with a 4 % rate derived from macro‑only assumptions. Recent news indicates Aon’s Commercial Risk business posted 7 % organic growth, the firm received a price‑target increase from Keefe, Bruyette & Woods, and BofA Securities lowered its target.

Arthur J. Gallagher & Co. (NYSE:AJG)

Evercore argues that AJG’s recent underperformance is overstated relative to its fundamentals. Historical analysis shows the broker has captured roughly three ppt of market‑share gain per year over the past decade, supporting an expectation of 5 % organic growth over the next three years even in a negative pricing environment. The stock trades at 17 times price‑to‑free‑cash‑flow, pricing in less than 4 % organic growth versus Evercore’s 5 % model. Additional upside could arise from synergies with Acordia Primary and potential revenue benefits in wholesale. AJG received a Jefferies Buy upgrade and announced acquisitions of environmental broker Twin Elms and program administrator McKee Risk Management.

Progressive Corp. (NYSE:PGR)

Progressive is gaining favor as auto‑policy‑in‑force growth is expected to stabilize above consensus levels. Bundling momentum in the second half of 2026 and 2027 could add an incremental 1‑2 ppt of net premiums written growth. The stock trades at 14 times normalized earnings, below its 16‑times long‑term average. Evercore highlights an advertising‑spend advantage of roughly $6 bn versus a $3 bn potential at GEICO, and the firm plans to leverage scaled data to enhance pricing sophistication. Progressive reported April net income up 10 % to $1.087 bn and net premiums written up 6 %, even as BofA Securities and BMO Capital cut its price targets.

Conclusion

Despite sector‑wide margin pressure, Evercore sees a spread in performance and identifies AON, Arthur J. Gallagher, and Progressive as the most attractive P&C insurers given their organic growth drivers, valuation metrics, and strategic initiatives.