Progressive has minimal exposure to California homeowners, says JPMorgan

JPMorgan says the Los Angeles area wildfires have worsened, with little progress on containment efforts and more fires sparking up in the nearby areas. It expects insured losses from the event to be confined mostly to its homeowners’ coverage names, and says Allstate (ALL), Travelers (TRV), and Chubb (CB) are the most exposed among public insurers. Commercial property, to a lesser extent, will also be impacted, and the names most exposed are Travelers, AIG (AIG), Chubb, and Kinsale Capital (KNSL), the analyst tells investors in a research note. JPMorgan views the wildfire event as an incremental negative for exposed personal lines carriers and reinsurers, although not enough to alter its stock recommendations. The exception is Progressive (PGR), which has minimal exposure to California homeowners but could benefit from greater pricing discipline at mutual carriers, which are likely to absorb a significant proportion of Los Angeles fire losses and are major competitors of the firm in personal auto insurance, contends JPMorgan.