Bad day, worse for insurance

I guess as a part time investor, I get to hear the news last in the wall street food chain. The news is out why HIG took a hit. Turned out HIG's CEO said that the industry's profit level might have peaked this year for at least the short term. A quick check, I found that the insurance companies in my portfolio also suffered: PGR down 1.84%, BER down 3.6%, FAF is down 1.2% (although title insurance is very different from casualty insurance). ZNT, which is on my watch list, suffers the least, down 0.5%. I am waiting for this baby to come down so I can swap it with PGR. In any case, the basis of this speculation is the underwriting margin is shrinking. With re-insurance rate going higher and premium not improving much, the money isn't much if you are looking to make a dime from underwrite policies. This is the time to test the specific company's ability to resist the temptation of a price war. Insurance is a commodity business, those can tough it out with financial strength will eventually emerge as the victor, and will be able to buy up competitors at the end of the tunnel at 50 cents on the dollar worth of business. With strong balance sheet, prudent management team, I expect HIG, BER, and PGR will come out ahead in a few year. This is good news indeed. (Probably good news for consumers in the short term, bad news in the long run)