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* Sandler O'Neill downgrades ALL, DFG, TRV, MIGP
* Expects limited book value, share growth in 2011
NEW YORK, Nov 22 (Reuters) - Shares of U.S.-listed property insurers mostly fell on Monday after brokerage Sandler O'Neill downgraded a number of the top companies in the sector, citing limited potential for performance in 2011.
Analyst Paul Newsome cited five main reasons for the downgrade: a highly competitive market; less strength from muni bond portfolios next year; likely harder comparisons on equity portfolios in 2011; more differentiation between successful and struggling underwriters; and challenges to increase earnings.
Newsome said he expected book values and share prices to rise in 2011 at a "materially slower pace" than this year.
In morning trading Travelers shares were down 1.1 percent, Allstate was down 1.6 percent, Mercer fell 1.5 percent and Delphi Financial was down 3.3 percent. The S&P insurance index .GSPINSC was down 1.2 percent.
At the same time as the downgrades, Sandler O'Neill upgraded one insurer, auto underwriter Progressive Corp (PGR.N), to "buy" from "hold."
Newsome cited recent strong performance, pricing power and above-consensus earnings expectations. Progressive shares were up 0.9 percent.
(Reporting by Ben Berkowitz, editing by Matthew Lewis)
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