Q1 Earnings Outperformers: Essent Group (NYSE:ESNT) And The Rest Of The Property & Casualty Insurance Stocks

June 25, 2025 at 23:32 PM EDT

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The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Essent Group (NYSE: ESNT) and the rest of the property & casualty insurance stocks fared in Q1.

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%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

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 print exceeded analysts’ expectations by 2.1%. Despite the top-line beat, it was still a mixed quarter for the company.

Interestingly, the stock is up 2.7% since reporting and currently trades at $60.27.

Is now the time to buy Essent Group? Access our full analysis of the earnings results 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 11.7% since reporting. It currently trades at $123.87.

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 14.2% since the results and currently trades at $55.24.

Read our full analysis of Fidelity National Financial’s results here.

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 $1.39 billion, up 9.4% year on year. This number beat analysts’ expectations by 2.2%. It was a very strong quarter as it also logged a solid beat of analysts’ EPS estimates.

The stock is up 8.4% since reporting and currently trades at $63.94.

Read our full, actionable report on Mercury General here, it’s free.

Skyward Specialty Insurance (NASDAQ: SKWD)

Founded in 2006 to serve markets where standard insurance coverage falls short, Skyward Specialty Insurance (NASDAQ: SKWD) provides customized commercial property, casualty, and health insurance solutions for underserved or specialized market niches.

Skyward Specialty Insurance reported revenues of $328.5 million, up 24% year on year. This print surpassed analysts’ expectations by 5.5%. Overall, it was a stunning quarter as it also put up an impressive beat of analysts’ net premiums earned and book value per share estimates.

The stock is up 6.4% since reporting and currently trades at $56.25.

Read our full, actionable report on Skyward Specialty Insurance 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.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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