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 Q3. 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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.8%.

In light of this news, share prices of the companies have held steady as they are up 3.2% on average 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 $12.44 billion, up 4.5% year on year. This print exceeded analysts’ expectations by 0.9%. Overall, it was a satisfactory quarter for the company with a beat of analysts’ EPS estimates but a significant miss of analysts’ book value per share estimates.

Interestingly, the stock is up 7.5% since reporting and currently trades at $289.64.

Is now the time to buy Travelers? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: 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 $387.8 million, up 26.9% year on year, outperforming analysts’ expectations by 4.5%. The business had an incredible quarter with a beat of analysts’ EPS and net premiums earned estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.8% since reporting. It currently trades at $81.67.

Is now the time to buy Root? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: 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 $138.7 million, down 88.9% year on year, falling short of analysts’ expectations by 52.7%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and EPS estimates.

Selective Insurance Group delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 3.4% since the results and currently trades at $78.44.

Read our full analysis of Selective Insurance Group’s results here.

Bowhead Specialty (NYSE: BOW)

Named after the Arctic bowhead whale known for navigating challenging waters, Bowhead Specialty Holdings (NYSE: BOW) is a specialty insurance company that provides customized coverage for complex and high-risk commercial sectors.

Bowhead Specialty reported revenues of $143.9 million, up 23.3% year on year. This print beat analysts’ expectations by 1.2%. Overall, it was a strong quarter as it also recorded a beat of analysts’ EPS estimates and a narrow beat of analysts’ revenue estimates.

The stock is up 13.6% since reporting and currently trades at $27.67.

Read our full, actionable report on Bowhead Specialty here, it’s free for active Edge members.

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 $1.58 billion, up 3.6% year on year. This number topped analysts’ expectations by 6.7%. It was a stunning quarter as it also put up a beat of analysts’ EPS and revenue estimates.

The stock is up 10.5% since reporting and currently trades at $88.13.

Read our full, actionable report on Mercury General here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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