Dear friends and colleagues,
Each December, the teams at Stonybrook Capital and Risk Management are pleased to share our outlook on the insurance and capital markets. We hope that you find this edition (2025 Overview) interesting. Some themes that we note are listed below (These are observations on current conditions and not recommendations to buy or sell).
- It has generally been a good market to underwrite and at the same time, a good market to raise capital; what is more any new capital raised could be invested in securities with higher yields than most current bond portfolios, as interest rates still remain relatively high on a historical basis.
- Our insurer stock price composite is just now setting a new record. If value investing continues to be in vogue this advance may continue.
- There were more insurance market IPOs in 2025 than in the previous five years and there are more to come soon; the broker and distribution sectors were notably under-represented, and we expect that to change.
- Credit spreads are now back down to pre-financial crisis levels.
- Other than the tragic California fires, it was a relatively benign year for insured catastrophes and other large losses, an easily sustainable level for our global industry’s multi-trillion-dollar capital base.
- Prices are softening for many lines, but core disciplines are largely staying strong. We expect healthy 2026 underwriting profits for the US P&C aggregate, with the public companies outperforming the aggregate by a significant degree, and with very different drivers across the various lines.
Your questions and comments on our analysis are always appreciated.
Our report also shares the growth of our team and capabilities. We particularly invite you to visit our new NYC offices next summer.
From all of us at the Stonybrook team, wishing you much health, happiness and success in 2026.
Joe Scheerer