Looking back on reinsurance stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Reinsurance Group of America (NYSE: RGA) and its peers.
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. The primary headwind remains the immense and concentrated exposure to large-scale catastrophe losses, as the growing impact of climate change challenges traditional risk models and creates significant earnings volatility. Additionally, they face the risk of adverse prior-year reserve development, where claims prove more costly than anticipated, while the eventual influx of new capital from alternative sources threatens to soften the market and compress future returns.
The 6 reinsurance stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.1%.
In light of this news, share prices of the companies have held steady as they are up 3.7% on average since the latest earnings results.
Weakest Q2: Reinsurance Group of America (NYSE: RGA)
Operating behind the scenes of the insurance industry since 1973, Reinsurance Group of America (NYSE: RGA) provides life and health reinsurance services to insurance companies, helping them manage risk and meet regulatory requirements.
Reinsurance Group of America reported revenues of $5.68 billion, up 10.9% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ net premiums earned and EPS estimates.
Tony Cheng, President and Chief Executive Officer, commented, “After a very strong first quarter, the second quarter operating results were below expectations, primarily reflecting claims volatility in our U.S. Individual Life business. However, we continue to execute successfully on our strategy, maintaining very good momentum overall and benefiting from the earnings diversity that comes from our global platform. New business in the quarter remained strong, and our Creation Re strategy continues to perform above expectations.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $191.03.
Read our full report on Reinsurance Group of America here, it’s free.
Best Q2: Hamilton Insurance Group (NYSE: HG)
Founded in 2013 and operating through three distinct underwriting platforms across four countries, Hamilton Insurance Group (NYSE: HG) operates global specialty insurance and reinsurance platforms across Lloyd's, Ireland, Bermuda, and the United States.
Hamilton Insurance Group reported revenues of $740.8 million, up 26% year on year, outperforming analysts’ expectations by 22.1%. The business had an exceptional quarter with a beat of analysts’ EPS and book value per share estimates.
Hamilton Insurance Group pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 14% since reporting. It currently trades at $24.56.
Is now the time to buy Hamilton Insurance Group? Access our full analysis of the earnings results here, it’s free.
AXIS Capital (NYSE: AXS)
Founded in the aftermath of the 9/11 attacks when insurance capacity was scarce, AXIS Capital Holdings Limited (NYSE: AXS) is a global specialty insurer and reinsurer that provides coverage for complex risks across property, liability, professional lines, cyber, and other specialty markets.
AXIS Capital reported revenues of $1.63 billion, up 8.6% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a beat of analysts’ EPS estimates but a significant miss of analysts’ net premiums earned estimates.
The stock is flat since the results and currently trades at $96.57.
Read our full analysis of AXIS Capital’s results here.
Everest Group (NYSE: EG)
Rebranded from Everest Re in 2023 to reflect its evolution beyond just reinsurance, Everest Group (NYSE: EG) underwrites property and casualty reinsurance and insurance worldwide, serving insurance companies, corporations, and other clients across six continents.
Everest Group reported revenues of $4.49 billion, up 6.2% year on year. This result surpassed analysts’ expectations by 1.7%. It was a strong quarter as it also logged a solid beat of analysts’ net premiums earned and EPS estimates.
Everest Group had the slowest revenue growth among its peers. The stock is up 3.3% since reporting and currently trades at $345.54.
Read our full, actionable report on Everest Group here, it’s free.
RenaissanceRe (NYSE: RNR)
Born in Bermuda after the devastating Hurricane Andrew created a crisis in the catastrophe insurance market, RenaissanceRe (NYSE: RNR) provides property, casualty, and specialty reinsurance and insurance solutions to customers worldwide, primarily through intermediaries.
RenaissanceRe reported revenues of $3.21 billion, up 13.4% year on year. This print beat analysts’ expectations by 8.7%. Overall, it was an exceptional quarter as it also put up a beat of analysts’ EPS and book value per share estimates.
The stock is up 5.5% since reporting and currently trades at $250.42.
Read our full, actionable report on RenaissanceRe here, it’s free.
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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