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5 Stocks to Buy From the Prosperous P&C Insurance Industry
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The Zacks Property and Casualty Insurance (P&C) industry is witnessing softer pricing after several years of improvement. However, it is likely to benefit from prudent underwriting, exposure growth and accelerated digitalization. Industry players like Berkshire Hathaway Inc. (BRK.B - Free Report) , The Travelers Companies (TRV - Free Report) , The Hanover Insurance Group (THG - Free Report) , First American Financial Inc. (FAF - Free Report) and Essent Group (ESNT - Free Report) are poised to grow despite all odds. Given an active catastrophe environment, the policy renewal rate should accelerate. The increasing adoption of technology and the emergence of insurtech help industry players function smoothly.
At its latest meeting, the Federal Reserve raised the benchmark interest rate by 25 basis points under Chair Kevin Warsh, lifting the federal funds rate target range to 3.75%-4%. This marked the Fed’s first rate increase since 2023. P&C insurers’ shorter-duration portfolios allow higher yields to flow into earnings more quickly, although the benefit is generally smaller relative to premium volume. An investment portfolio skewed toward fixed-income maturities provides some upside.
The imposition of tariffs by President Trump, as well as higher inflation, will have an impact on pricing. Nonetheless, an improvement in surplus and accelerated economic activities set the stage for a better M&A environment. Per Fitch Ratings, personal auto is expected to stay strong, and, coupled with better investment results and lower claims, should fuel insurers' performance.
About the Industry
The Zacks Property and Casualty Insurance industry comprises companies that provide commercial and personal property insurance, and casualty insurance products and services. Such insurance helps to safeguard property in case of any natural or man-made disasters. Some industry players also provide liability coverage. The insurance coverage offered also includes automobiles, professional risk, marine, excess casualty, aviation, personal accident, commercial multi-peril, and professional indemnity and surety. Premiums are the primary source of revenues for these insurers. Better pricing and increased exposure drive premiums. These companies invest a portion of premiums to meet their commitments to policyholders. However, rate cuts by the Fed pose downside risk.
4 Trends Shaping the Future of the Property and Casualty Insurance Industry
Proper pricing to help navigate claims: Catastrophic events continue to pressure insurers, often prompting rate increases to support claims payments. However, Marsh’s Global Insurance Market Index showed a 6% decline in global commercial insurance rates in second-quarter 2026—the eighth consecutive quarter of moderation—amid stronger competition, favorable claims trends and improved reinsurance conditions. Disciplined pricing remains essential, as appropriately priced portfolios improve loss ratios and free capital for efficient claims servicing. Fitch Ratings sees strong momentum in personal auto insurance, while S&P Global expects underwriting profits to stabilize. Deloitte projects global premiums to reach $722 billion by 2030, led by China and North America, while Swiss Re forecasts 4% premium growth in 2026.
Catastrophe loss induces volatility in underwriting profits: The property and casualty insurance industry is susceptible to catastrophe events, which drag down underwriting profits. Global insured natural catastrophe losses reached an estimated $42 billion in the first half of 2026, according to the Swiss Re Institute. AM Best stated that the U.S. property & casualty insurance industry recorded $31.2 billion in net underwriting income during the first half of 2026, while the combined ratio improved 400 basis points to 92.5 in the same period, as reported in Captive.com. Swiss Re projects the combined ratio to deteriorate by 50 basis points to 99% in 2026 as catastrophe pressure normalizes. Insurance Information Institute and Milliman expect personal lines insurers to face higher catastrophe-related losses, which could weigh on underwriting profitability. S&P Global expects underwriting profitability to stabilize as insurers balance growth and pricing discipline.
Mergers and acquisitions: Consolidation in the property and casualty industry is likely to continue as players look to diversify their operations into new business lines and geographies. Buying businesses along the same lines will also continue as players look to gain market share and grow in their niche areas. With a sturdy capital level, the industry is witnessing a number of mergers, acquisitions and consolidations.
Increased adoption of technology: The industry is witnessing increased use of technologies like blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation that expedite business operations and save costs. The industry has also witnessed the emergence of insurtechs or technology-led insurers. The focus of insurtech is mainly on the property and casualty insurance industry. Insurers continue to invest heavily in technology, generative AI in particular, as it is expected to improve basis points, scale and efficiencies. However, the use of technology poses cyber threats.
Zacks Industry Rank Indicates Bright Prospects
The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates encouraging prospects in the near term. The Zacks Property and Casualty Insurance industry, which is housed within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #71, which places it in the top 29% of more than 250 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Earnings estimates for 2026 have increased 6.1% year over year.
Before we present a few property and casualty stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector and the S&P 500
The Property and Casualty Insurance industry has outperformed its sector and the Zacks S&P 500 composite in the past three months. The stocks in this industry have collectively gained 4.6% compared with the sector’s increase of 1.3% and the Zacks S&P 500 composite’s increase of 2% in the said time frame.
Price Performance
Current Valuation
On the basis of the trailing 12-month price-to-book (P/B), which is commonly used for valuing insurance stocks, the industry is currently trading at 1.43X compared with the S&P 500’s 7.19X and the sector’s 4.43X.
Over the past five years, the industry has traded as high as 1.74X, as low as 1.18X and at the median of 1.46X.
Price-to-Book (P/B) Ratio (TTM)
Price-to-Book (P/B) Ratio (TTM)
5 Property and Casualty Insurance Stocks to Bet On
The Hanover Insurance: Headquartered in Worcester, MA, Hanover Insurance is a U.S. property and casualty insurance holding company that sells through independent agents and brokers. The insurer is poised to grow on disciplined underwriting, effective pricing, specialty insurance expansion and rising investment income. Specialty continues to anchor results through disciplined risk selection and improving mix via workflow and technology upgrades. Personal Lines is benefiting from earned pricing and margin initiatives, and management expects policies in force to grow in 2026. This Zacks Rank #1 company remains committed to returning capital to shareholders through a combination of dividends and share repurchases.
The Zacks Consensus Estimate for THG’s 2026 and 2027 earnings suggests a 5.7% rise and a 2.8% decline, respectively. The company delivered a four-quarter average earnings surprise of 27.33%. The consensus estimate for 2026 and 2027 earnings has moved 9.7% and 6.7% north, respectively, in the past 60 days. The company has a VGM Score of B.
Price and Consensus: THG
Berkshire Hathaway: Omaha, NE-based Berkshire Hathaway owns more than 90 subsidiaries in insurance, railroads, utilities, manufacturing services, retail and homebuilding. BRK.B is one of the largest property and casualty insurance companies measured by premium volume. BRK.B, carrying a Zacks Rank #2, should continue to benefit from its growing Insurance business as well as Manufacturing, Service and Retailing, and Finance and Financial Products segments. Continued insurance business growth fuels an increase in float, drives earnings and generates maximum return on equity. With Warren Buffett as chairman emeritus, the focus will be on whether the conglomerate continues to create tremendous value for shareholders under the new leadership.
The Zacks Consensus Estimate for BRK.B’s 2026 and 2027 earnings suggests 5.1% and 1.9% year-over-year growth, respectively. The company delivered a four-quarter average earnings surprise of 2.04%. The expected long-term earnings growth rate is pegged at 12%. The consensus estimate for 2026 and 2027 earnings has moved 3.8% and 2% north, respectively, in the past 60 days.
Price and Consensus: BRK.B
Travelers Companies: Based in New York, NY, Travelers Companies is one of the leading writers of auto and homeowners’ insurance, plus commercial U.S. property-casualty insurance. High levels of retention, improved pricing, increased new business and a positive renewal premium change, banking on the strength of a compelling product portfolio of coverages across nine lines of business, position it well for growth. Travelers’ commercial businesses should continue to perform well on the back of stability in the markets where it operates, as well as the execution of its strategies. It has a Zacks Rank #2.
The Zacks Consensus Estimate for TRV’s 2026 and 2027 earnings suggests a 22.6% rise and an 11.3% decline, respectively. The company delivered a four-quarter average earnings surprise of 41.68%. The expected long-term earnings growth rate is pegged at 4.4%. The consensus estimate for 2026 and 2027 earnings has moved 9.8% and 2.8% north, respectively, in the past 60 days.
Price and Consensus: TRV
First American Financial: Headquartered in Santa Ana, CA, First American Financial remains a leading U.S. title insurer with scale, proprietary data and a broad distribution network that support durable competitive advantages. Commercial activity, growing deposits at First American Trust and expanding automation provide earnings drivers beyond a weak residential market. AI initiatives such as Endpoint and Sequoia could improve service levels and efficiency as adoption broadens. It has a Zacks Rank #2.
The Zacks Consensus Estimate for FAF’s 2026 and 2027 earnings suggests 17.5% and 4.2% year-over-year growth, respectively. The company delivered a four-quarter average earnings surprise of 1.77%. The expected long-term earnings growth rate is pegged at 15.2%. The consensus estimate for 2026 and 2027 earnings has moved 5.5% and 3.9% north, respectively, in the past 60 days.
Price and Consensus: FAF
Essent Group: Headquartered in Hamilton, Bermuda, Essent Group boasts a strong position in the U.S. private mortgage insurance market, disciplined underwriting, and a capital-light business model. Conservative risk management, a high-quality insured portfolio and a robust capital position support resilient earnings across credit cycles while benefiting from structural demand for mortgage insurance. Essent consistently generates strong free cash flow, enabling shareholder-friendly capital allocation through dividends and share repurchases while maintaining regulatory capital buffers. It carries a Zacks Rank #2.
The Zacks Consensus Estimate for ESNT’s 2026 and 2027 earnings suggests 10.1% and 3.5% year-over-year growth, respectively. The company delivered a four-quarter average earnings surprise of 1.57%. The consensus estimate for 2026 and 2027 earnings has moved 5% and 2.9% north, respectively, in the past 60 days. The expected long-term earnings growth rate is pegged at 5.2%.
View the Zacks #1 Rank List
Image: Bigstock
5 Stocks to Buy From the Prosperous P&C Insurance Industry
The Zacks Property and Casualty Insurance (P&C) industry is witnessing softer pricing after several years of improvement. However, it is likely to benefit from prudent underwriting, exposure growth and accelerated digitalization. Industry players like Berkshire Hathaway Inc. (BRK.B - Free Report) , The Travelers Companies (TRV - Free Report) , The Hanover Insurance Group (THG - Free Report) , First American Financial Inc. (FAF - Free Report) and Essent Group (ESNT - Free Report) are poised to grow despite all odds. Given an active catastrophe environment, the policy renewal rate should accelerate. The increasing adoption of technology and the emergence of insurtech help industry players function smoothly.
At its latest meeting, the Federal Reserve raised the benchmark interest rate by 25 basis points under Chair Kevin Warsh, lifting the federal funds rate target range to 3.75%-4%. This marked the Fed’s first rate increase since 2023. P&C insurers’ shorter-duration portfolios allow higher yields to flow into earnings more quickly, although the benefit is generally smaller relative to premium volume. An investment portfolio skewed toward fixed-income maturities provides some upside.
The imposition of tariffs by President Trump, as well as higher inflation, will have an impact on pricing. Nonetheless, an improvement in surplus and accelerated economic activities set the stage for a better M&A environment. Per Fitch Ratings, personal auto is expected to stay strong, and, coupled with better investment results and lower claims, should fuel insurers' performance.
About the Industry
The Zacks Property and Casualty Insurance industry comprises companies that provide commercial and personal property insurance, and casualty insurance products and services. Such insurance helps to safeguard property in case of any natural or man-made disasters. Some industry players also provide liability coverage. The insurance coverage offered also includes automobiles, professional risk, marine, excess casualty, aviation, personal accident, commercial multi-peril, and professional indemnity and surety. Premiums are the primary source of revenues for these insurers. Better pricing and increased exposure drive premiums. These companies invest a portion of premiums to meet their commitments to policyholders. However, rate cuts by the Fed pose downside risk.
4 Trends Shaping the Future of the Property and Casualty Insurance Industry
Proper pricing to help navigate claims: Catastrophic events continue to pressure insurers, often prompting rate increases to support claims payments. However, Marsh’s Global Insurance Market Index showed a 6% decline in global commercial insurance rates in second-quarter 2026—the eighth consecutive quarter of moderation—amid stronger competition, favorable claims trends and improved reinsurance conditions. Disciplined pricing remains essential, as appropriately priced portfolios improve loss ratios and free capital for efficient claims servicing. Fitch Ratings sees strong momentum in personal auto insurance, while S&P Global expects underwriting profits to stabilize. Deloitte projects global premiums to reach $722 billion by 2030, led by China and North America, while Swiss Re forecasts 4% premium growth in 2026.
Catastrophe loss induces volatility in underwriting profits: The property and casualty insurance industry is susceptible to catastrophe events, which drag down underwriting profits. Global insured natural catastrophe losses reached an estimated $42 billion in the first half of 2026, according to the Swiss Re Institute. AM Best stated that the U.S. property & casualty insurance industry recorded $31.2 billion in net underwriting income during the first half of 2026, while the combined ratio improved 400 basis points to 92.5 in the same period, as reported in Captive.com. Swiss Re projects the combined ratio to deteriorate by 50 basis points to 99% in 2026 as catastrophe pressure normalizes. Insurance Information Institute and Milliman expect personal lines insurers to face higher catastrophe-related losses, which could weigh on underwriting profitability. S&P Global expects underwriting profitability to stabilize as insurers balance growth and pricing discipline.
Mergers and acquisitions: Consolidation in the property and casualty industry is likely to continue as players look to diversify their operations into new business lines and geographies. Buying businesses along the same lines will also continue as players look to gain market share and grow in their niche areas. With a sturdy capital level, the industry is witnessing a number of mergers, acquisitions and consolidations.
Increased adoption of technology: The industry is witnessing increased use of technologies like blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation that expedite business operations and save costs. The industry has also witnessed the emergence of insurtechs or technology-led insurers. The focus of insurtech is mainly on the property and casualty insurance industry. Insurers continue to invest heavily in technology, generative AI in particular, as it is expected to improve basis points, scale and efficiencies. However, the use of technology poses cyber threats.
Zacks Industry Rank Indicates Bright Prospects
The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates encouraging prospects in the near term. The Zacks Property and Casualty Insurance industry, which is housed within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #71, which places it in the top 29% of more than 250 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Earnings estimates for 2026 have increased 6.1% year over year.
Before we present a few property and casualty stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector and the S&P 500
The Property and Casualty Insurance industry has outperformed its sector and the Zacks S&P 500 composite in the past three months. The stocks in this industry have collectively gained 4.6% compared with the sector’s increase of 1.3% and the Zacks S&P 500 composite’s increase of 2% in the said time frame.
Price Performance
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Current Valuation
On the basis of the trailing 12-month price-to-book (P/B), which is commonly used for valuing insurance stocks, the industry is currently trading at 1.43X compared with the S&P 500’s 7.19X and the sector’s 4.43X.
Over the past five years, the industry has traded as high as 1.74X, as low as 1.18X and at the median of 1.46X.
Price-to-Book (P/B) Ratio (TTM)
Price-to-Book (P/B) Ratio (TTM)
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5 Property and Casualty Insurance Stocks to Bet On
Here, we are discussing one Zacks Rank #1 (Strong Buy) stock and four Zacks Rank #2 (Buy) stocks from the P&C Insurance industry. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hanover Insurance: Headquartered in Worcester, MA, Hanover Insurance is a U.S. property and casualty insurance holding company that sells through independent agents and brokers. The insurer is poised to grow on disciplined underwriting, effective pricing, specialty insurance expansion and rising investment income. Specialty continues to anchor results through disciplined risk selection and improving mix via workflow and technology upgrades. Personal Lines is benefiting from earned pricing and margin initiatives, and management expects policies in force to grow in 2026. This Zacks Rank #1 company remains committed to returning capital to shareholders through a combination of dividends and share repurchases.
The Zacks Consensus Estimate for THG’s 2026 and 2027 earnings suggests a 5.7% rise and a 2.8% decline, respectively. The company delivered a four-quarter average earnings surprise of 27.33%. The consensus estimate for 2026 and 2027 earnings has moved 9.7% and 6.7% north, respectively, in the past 60 days. The company has a VGM Score of B.
Price and Consensus: THG
Berkshire Hathaway: Omaha, NE-based Berkshire Hathaway owns more than 90 subsidiaries in insurance, railroads, utilities, manufacturing services, retail and homebuilding. BRK.B is one of the largest property and casualty insurance companies measured by premium volume. BRK.B, carrying a Zacks Rank #2, should continue to benefit from its growing Insurance business as well as Manufacturing, Service and Retailing, and Finance and Financial Products segments. Continued insurance business growth fuels an increase in float, drives earnings and generates maximum return on equity. With Warren Buffett as chairman emeritus, the focus will be on whether the conglomerate continues to create tremendous value for shareholders under the new leadership.
The Zacks Consensus Estimate for BRK.B’s 2026 and 2027 earnings suggests 5.1% and 1.9% year-over-year growth, respectively. The company delivered a four-quarter average earnings surprise of 2.04%. The expected long-term earnings growth rate is pegged at 12%. The consensus estimate for 2026 and 2027 earnings has moved 3.8% and 2% north, respectively, in the past 60 days.
Price and Consensus: BRK.B
Travelers Companies: Based in New York, NY, Travelers Companies is one of the leading writers of auto and homeowners’ insurance, plus commercial U.S. property-casualty insurance. High levels of retention, improved pricing, increased new business and a positive renewal premium change, banking on the strength of a compelling product portfolio of coverages across nine lines of business, position it well for growth. Travelers’ commercial businesses should continue to perform well on the back of stability in the markets where it operates, as well as the execution of its strategies. It has a Zacks Rank #2.
The Zacks Consensus Estimate for TRV’s 2026 and 2027 earnings suggests a 22.6% rise and an 11.3% decline, respectively. The company delivered a four-quarter average earnings surprise of 41.68%. The expected long-term earnings growth rate is pegged at 4.4%. The consensus estimate for 2026 and 2027 earnings has moved 9.8% and 2.8% north, respectively, in the past 60 days.
Price and Consensus: TRV
First American Financial: Headquartered in Santa Ana, CA, First American Financial remains a leading U.S. title insurer with scale, proprietary data and a broad distribution network that support durable competitive advantages. Commercial activity, growing deposits at First American Trust and expanding automation provide earnings drivers beyond a weak residential market. AI initiatives such as Endpoint and Sequoia could improve service levels and efficiency as adoption broadens. It has a Zacks Rank #2.
The Zacks Consensus Estimate for FAF’s 2026 and 2027 earnings suggests 17.5% and 4.2% year-over-year growth, respectively. The company delivered a four-quarter average earnings surprise of 1.77%. The expected long-term earnings growth rate is pegged at 15.2%. The consensus estimate for 2026 and 2027 earnings has moved 5.5% and 3.9% north, respectively, in the past 60 days.
Price and Consensus: FAF
Essent Group: Headquartered in Hamilton, Bermuda, Essent Group boasts a strong position in the U.S. private mortgage insurance market, disciplined underwriting, and a capital-light business model. Conservative risk management, a high-quality insured portfolio and a robust capital position support resilient earnings across credit cycles while benefiting from structural demand for mortgage insurance. Essent consistently generates strong free cash flow, enabling shareholder-friendly capital allocation through dividends and share repurchases while maintaining regulatory capital buffers. It carries a Zacks Rank #2.
The Zacks Consensus Estimate for ESNT’s 2026 and 2027 earnings suggests 10.1% and 3.5% year-over-year growth, respectively. The company delivered a four-quarter average earnings surprise of 1.57%. The consensus estimate for 2026 and 2027 earnings has moved 5% and 2.9% north, respectively, in the past 60 days. The expected long-term earnings growth rate is pegged at 5.2%.
Price and Consensus: ESNT
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