As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the property & casualty insurance industry, including Trupanion (NASDAQ: TRUP) 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%.
In light of this news, share prices of the companies have held steady as they are up 4.9% on average since the latest earnings results.
Trupanion (NASDAQ: TRUP)
Born from a vision to help pet owners avoid economic euthanasia when faced with expensive veterinary bills, Trupanion (NASDAQ: TRUP) provides medical insurance for cats and dogs through data-driven, vertically-integrated products priced specifically for each pet's unique characteristics.
Trupanion reported revenues of $353.6 million, up 12.3% year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ book value per share and EPS estimates.
“The second quarter was one of the strongest financial quarters in our history, marked by consistent top-line growth, robust margin expansion and strengthening retention,” said Margi Tooth, Chief Executive Officer and President of Trupanion.
Unsurprisingly, the stock is down 9.5% since reporting and currently trades at $44.18.
We think Trupanion is a good business, but is it a buy today? Read our full report here, it’s free.
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, outperforming analysts’ expectations by 7.5%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ and net premiums earned estimates.
The market seems unhappy with the results as the stock is down 20.1% since reporting. It currently trades at $98.35.
Is now the time to buy Root? 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 $78.32.
Read our full analysis of Selective Insurance Group’s results here.
Cincinnati Financial (NASDAQ: CINF)
Founded in 1950 by independent insurance agents seeking stable market options for their clients, Cincinnati Financial (NASDAQ: CINF) provides property casualty insurance, life insurance, and related financial services through independent agencies across 46 states.
Cincinnati Financial reported revenues of $3.25 billion, up 34.9% year on year. This number surpassed analysts’ expectations by 12.8%. Overall, it was an exceptional quarter as it also produced a beat of analysts’ EPS and book value per share estimates.
The stock is up 4.9% since reporting and currently trades at $154.44.
Read our full, actionable report on Cincinnati Financial here, it’s free.
Stewart Information Services (NYSE: STC)
Founded in 1893 during America's westward expansion when property records were often disputed, Stewart Information Services (NYSE: STC) provides title insurance and real estate services, helping homebuyers, sellers, and lenders verify property ownership and protect against title defects.
Stewart Information Services reported revenues of $723.4 million, up 20.1% year on year. This result topped analysts’ expectations by 9.2%. Overall, it was an exceptional quarter as it also recorded a beat of analysts’ EPS estimates.
The stock is up 24.4% since reporting and currently trades at $74.07.
Read our full, actionable report on Stewart Information Services 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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