Goldman Sachs Provides Color on Property and Casualty Sector

Goldman Sachs provided color on the property and casualty sector. In a research report published today, Goldman Sachs reiterated its Buy rating on XL Group XL. The report states, "We reiterate our CL-Buy call on XL, as we continue to believe that, within our coverage, XL is the most exposed to positive rate trends in Property CAT and has the lowest valuation. A few recent points on XL: (1) the quick appointment of a new CFO with significant insurance industry expertise is very positive; (2) The preliminary Russell index annual reconstitution on June 10th did not have XL as an index delete; and (3) XL announced CAT losses for the April and May U.S. storms which we have reflected in our estimates." On Friday, XL closed the week at $21.32. Goldman Sachs also provided color on Progressive PGR following the company's investor day. The report states, "Our five key takeaways were (1) Snapshot is cool but positive impact on PGR could be slow as privacy concerns could slow adoption and early policies likely come from existing customers; (2) a strategy to attract and retain preferred bundled customers without a well-known homeowners offering will be a challenge; (3) growth in 2H11 could be better than 1H11 as large states where PGR made changes come back on line (e.g. NY, NJ, and FL); (4) an additional 75 mn share buyback authorization, and (5) a preference to keep the investment portfolio duration short despite current rates." On Friday, Progressive ended the week at $20.36.