Looking back on property & casualty insurance stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Root (NASDAQ:ROOT) and its peers.
Property & Casualty (P&C) insurers protect individuals and businesses against financial loss from damage to property or from legal liability. This is a cyclical industry, and the sector benefits when there is 'hard market', characterized by strong premium rate increases that outpace loss and cost inflation, resulting in robust underwriting margins. The opposite is true in a 'soft market'. Interest rates also matter, as they determine the yields earned on fixed-income portfolios. On the other hand, P&C insurers face a major secular headwind from the increasing frequency and severity of catastrophe losses due to climate change. Furthermore, the liability side of the business is pressured by 'social inflation'—the trend of rising litigation costs and larger jury awards.
The 33 property & casualty insurance stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.5%.
Thankfully, share prices of the companies have been resilient as they are up 5.4% on average since the latest earnings results.
Best Q2: Root (NASDAQ:ROOT)
Pioneering a data-driven approach that rewards good driving habits, Root (NASDAQ:ROOT) is a technology-driven auto insurance company that uses mobile apps to acquire customers and data science to price policies based on individual driving behavior.
Root reported revenues of $382.9 million, up 32.4% year on year. This print exceeded analysts’ expectations by 7.5%. Overall, it was an incredible quarter for the company with an impressive beat of analysts’ EPS and net premiums earned estimates.
Unsurprisingly, the stock is down 18.1% since reporting and currently trades at $100.78.
Is now the time to buy Root? Access our full analysis of the earnings results here, it’s free.
Mercury General (NYSE:MCY)
Founded in 1961 and maintaining a network of over 6,300 independent agents across the country, Mercury General (NYSE:MCY) is an insurance company that primarily sells automobile insurance policies through independent agents in 11 states, with a strong focus on California.
Mercury General reported revenues of $1.48 billion, up 13.2% year on year, outperforming analysts’ expectations by 2%. The business had a stunning quarter with a beat of analysts’ EPS and net premiums earned estimates.
The market seems happy with the results as the stock is up 12.9% since reporting. It currently trades at $79.31.
Is now the time to buy Mercury General? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Selective Insurance Group (NASDAQ:SIGI)
Founded in 1926 during the early days of automobile insurance, Selective Insurance Group (NASDAQ:SIGI) is a property and casualty insurance company that sells commercial, personal, and excess and surplus lines insurance products through independent agents.
Selective Insurance Group reported revenues of $127.9 million, down 89.3% year on year, falling short of analysts’ expectations by 90.3%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS and book value per share estimates.
Selective Insurance Group delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 13.4% since the results and currently trades at $78.30.
Read our full analysis of Selective Insurance Group’s results here.
Assurant (NYSE:AIZ)
With roots dating back to 1892 when it was founded by a Civil War veteran, Assurant (NYSE:AIZ) provides specialized insurance products and services that protect major consumer purchases like mobile devices, vehicles, homes, and appliances.
Assurant reported revenues of $3.16 billion, up 8% year on year. This print beat analysts’ expectations by 1.4%. Overall, it was a very strong quarter as it also put up a beat of analysts’ EPS estimates.
The stock is up 10.6% since reporting and currently trades at $209.07.
Read our full, actionable report on Assurant here, it’s free.
Radian Group (NYSE:RDN)
Founded during the housing boom of 1977 and weathering multiple real estate cycles since, Radian Group (NYSE:RDN) provides mortgage insurance and real estate services, helping lenders manage risk and homebuyers achieve affordable homeownership.
Radian Group reported revenues of $318 million, flat year on year. This number missed analysts’ expectations by 1.9%. It was a slower quarter as it also produced a slight miss of analysts’ net premiums earned estimates and a narrow beat of analysts’ EPS estimates.
The stock is up 9.3% since reporting and currently trades at $36.67.
Read our full, actionable report on Radian Group here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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