Why Jefferies favors P&C brokers over carriers into 2026, names top picks

Investing.com -- Jefferies sees property and casualty (P&C) insurance brokers as the safer positioning within insurance heading into 2026, arguing that the group should continue to outperform carriers even as pricing momentum moderates across commercial lines.

Analysts led by Andrew Andersen said they maintain a “positive broker bias amid rate moderation,” favoring scale players and large-account exposure as organic growth slows but remains resilient.

Driving Jefferies’ view is the ability of brokers to sustain organic momentum despite a more competitive pricing environment. Commercial pricing is expected to continue moderating into 2026, with property lines facing the sharpest pressure, while casualty and specialty remain more resilient.

Against that backdrop, analysts expect brokers to rely less on rate-driven tailwinds and more on advisory services, productivity gains, and sector-specific exposures to defend growth. 

"We favor brokers over carriers into 2026 and large account brokers within the group, as organic momentum mostly holds and select names benefit from macro/sector tailwinds (data centers, M&A svcs, healthcare inflation) and producer productivity which combined also helps drive margin expansion," they wrote. 

Margin expansion is expected to slow from prior years as fiduciary income and contingent commissions normalize, analysts added, while opportunistic hiring and M&A-related integration weigh on profitability.

Tuck-in acquisition pipelines remain active and larger deals are still possible, but in the near term some brokers are likely to prioritize share repurchases for capital deployment, analysts said.

Investor sentiment is also more focused on brokers than on P&C carriers.

Within the group, Jefferies named Aon and Willis Towers Watson as its top commercial broker picks. 

In personal lines, analysts also reiterated a Buy on Goosehead Insurance, describing it as “the best way to play a softening personal lines insurance market” as easing pricing and improving carrier capacity support new business and retention.

Jefferies is also selectively constructive on some insurtech names, reiterating Buy ratings on Root and Hippo.