As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at property & casualty insurance stocks, starting with Travelers (NYSE: TRV).
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 mixed Q1. As a group, revenues beat analysts’ consensus estimates by 2.4%.
While some property & casualty insurance stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.4% since the latest earnings results.
Travelers (NYSE: TRV)
Tracing its roots back to 1853 when it insured travelers against accidents on steamboats and railroads, Travelers (NYSE: TRV) provides a wide range of commercial and personal property and casualty insurance products to businesses, government units, associations, and individuals.
Travelers reported revenues of $11.87 billion, up 6% year on year. This print fell short of analysts’ expectations by 2.3%. Overall, it was a slower quarter for the company with a significant miss of analysts’ book value per share and net premiums earned estimates.
The stock is down 6.4% since reporting and currently trades at $254.44.
Read our full report on Travelers here, it’s free.
Best Q1: 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 $349.4 million, up 37.1% year on year, outperforming analysts’ expectations by 9.1%. The business had an incredible quarter with a solid beat of analysts’ EPS and net premiums earned estimates.
The market seems unhappy with the results as the stock is down 15.9% since reporting. It currently trades at $118.
Is now the time to buy Root? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Fidelity National Financial (NYSE: FNF)
Issuing more title insurance policies than any other company in the United States, Fidelity National Financial (NYSE: FNF) provides title insurance and escrow services for real estate transactions while also offering annuities and life insurance through its F&G subsidiary.
Fidelity National Financial reported revenues of $2.73 billion, down 17.3% year on year, falling short of analysts’ expectations by 17.9%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
Fidelity National Financial delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 19.7% since the results and currently trades at $51.70.
Read our full analysis of Fidelity National Financial’s results here.
Old Republic International (NYSE: ORI)
Founded during the Roaring Twenties in 1923 and weathering nearly a century of economic cycles, Old Republic International (NYSE: ORI) is a diversified insurance holding company that provides property, liability, title, and mortgage guaranty insurance through its various subsidiaries.
Old Republic International reported revenues of $2.06 billion, up 2.1% year on year. This result met analysts’ expectations. Aside from that, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ book value per share estimates but a significant miss of analysts’ net premiums earned estimates.
The stock is flat since reporting and currently trades at $38.12.
Read our full, actionable report on Old Republic International here, it’s free.
Essent Group (NYSE: ESNT)
Serving as a crucial bridge between homebuyers and the American dream of homeownership, Essent Group (NYSE: ESNT) provides private mortgage insurance and title services that enable lenders to offer home loans with down payments of less than 20%.
Essent Group reported revenues of $317.6 million, up 6.4% year on year. This number topped analysts’ expectations by 2.1%. Taking a step back, it was a mixed quarter as it logged EPS in line with analysts’ estimates.
The stock is down 4.6% since reporting and currently trades at $56.
Read our full, actionable report on Essent Group here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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