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5 Mid & Small-Cap Stock Picks From the Booming P&C Insurance Industry
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Key Takeaways
HRTG sees 61.7% earnings growth in 2025, with estimates up 33.7% over the past month.
HGTY combines collector car coverage with club perks, boosting revenues and earnings by double digits.
PLMR lifts 2025 income guidance and expects stronger investment income and lower loss ratios.
The Property and Casualty (P&C) insurance space is set to benefit from better pricing, prudent underwriting, increased exposure, an improving rate environment and a solid capital position. With the ongoing economic expansion, insurers remain well-poised for growth.
The Zacks-defined Property & Casualty Insurance industry is currently in the top 18% of the Zacks Industry Rank. Since it is ranked in the top half of the Zacks Ranked Industries, we expect it to outperform the market over the next three to six months.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
Heritage Insurance Holdings Inc.
Zacks Rank #1 Heritage Insurance provides personal and commercial residential insurance products in the United States. HRTG also provides restoration, emergency, and recovery services, property management, and reinsurance services, homeowners insurance products, including single-family, homeowners or duplex, and condominium owners; and dwelling fire insurance policies.
In addition, HRTG offers personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as distribute indirectly to retail locations through wholesale agency relationships.
Heritage Insurance has an expected revenue and earnings growth rate of 4.6% and 61.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 33.7% over the last 30 days.
Hagerty Inc.
Zacks Rank #1 Hagerty provides insurance services for collector cars and enthusiast vehicles in the United States. HGTY is engaged in the underwriting, selling, and servicing collector car and enthusiast vehicle insurance policies.
HGTY also provides Hagerty Drivers Club memberships, which are primarily bundled with insurance policies and give subscribers access to an array of products and services, such as emergency roadside assistance, Hagerty Drivers Club magazine, automotive enthusiast events, a proprietary vehicle valuation tool, and special vehicle-related discounts. In addition, HGTY offers marketplace to complement insurance and membership offerings.
Hagerty has an expected revenue and earnings growth rate of 13.2% and 33.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.2% over the last 30 days.
HCI Group Inc.
Zacks Rank #2 HCI Group is engaged in property and casualty insurance, insurance management, reinsurance, real estate, and information technology businesses in Florida. HCI provides residential insurance products, such as homeowners, fire, flood, and wind-only insurance to homeowners, condominium owners, and tenants for properties, as well as offers reinsurance programs. HCI also owns and operates waterfront properties and retail shopping centers, and an office building, as well as commercial properties for investment purposes.
In addition, HCI designs and develops web-based applications and products for mobile devices, including SAMS, an online policy administration platform, Harmony, a policy administration platform, ClaimColony, an end-to-end claims management platform, and AtlasViewer, a mapping and data visualization platform.
HCI Group has an expected revenue and earnings growth rate of 18.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the last 30 days.
Palomar Holdings Inc.
Zacks Rank #1 Palomar Holdings’ focus on new business, strong premium retention rates for existing business and renewal of existing policies poise it well for growth. PLMR aims to be an industry leader in the crop business by 2025. PLMR should benefit from its solid product portfolio as well as geographic expansion and rate increases.
Net investment income is expected to grow on the back of a higher average balance of investments. PLMR raised adjusted net income guidance to a range of $186 million to $200 million in 2025, which includes $8-$12 million of additional catastrophe losses.
Yet, exposure to catastrophe loss induces underwriting volatility. PLMR strives to protect earnings and balance sheet, with its reinsurance program helping it to generate an improved combined ratio. High costs can strain margin expansion. PLMR estimates the loss ratio to be in the low 30s in 2025.
Palomar Holdings has an expected revenue and earnings growth rate of 42.3% and 36.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the last 30 days.
United Fire Group Inc.
Zacks Rank #2 United Fire Group provides property and casualty insurance for individuals and businesses in the United States. UFCS sells its products through a network of independent agencies.
UFCS’ commercial lines include fire and allied lines, other liability, automobile, workers' compensation, fidelity and surety coverage, and other insurance products, and personal lines comprise automobile, and fire and allied lines coverage, including assumed reinsurance for homeowners’ multi-peril coverage.
United Fire Group has an expected revenue and earnings growth rate of 6.7% and -2.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.6% over the last 30 days.
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5 Mid & Small-Cap Stock Picks From the Booming P&C Insurance Industry
Key Takeaways
The Property and Casualty (P&C) insurance space is set to benefit from better pricing, prudent underwriting, increased exposure, an improving rate environment and a solid capital position. With the ongoing economic expansion, insurers remain well-poised for growth.
The Zacks-defined Property & Casualty Insurance industry is currently in the top 18% of the Zacks Industry Rank. Since it is ranked in the top half of the Zacks Ranked Industries, we expect it to outperform the market over the next three to six months.
We have narrowed our search to five P&C insurers with strong potential for the rest of 2025. These are: Heritage Insurance Holdings Inc. (HRTG - Free Report) , Hagerty Inc. (HGTY - Free Report) , HCI Group Inc. (HCI - Free Report) , Palomar Holdings Inc. (PLMR - Free Report) and United Fire Group Inc. (UFCS - Free Report) . Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
Heritage Insurance Holdings Inc.
Zacks Rank #1 Heritage Insurance provides personal and commercial residential insurance products in the United States. HRTG also provides restoration, emergency, and recovery services, property management, and reinsurance services, homeowners insurance products, including single-family, homeowners or duplex, and condominium owners; and dwelling fire insurance policies.
In addition, HRTG offers personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as distribute indirectly to retail locations through wholesale agency relationships.
Heritage Insurance has an expected revenue and earnings growth rate of 4.6% and 61.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 33.7% over the last 30 days.
Hagerty Inc.
Zacks Rank #1 Hagerty provides insurance services for collector cars and enthusiast vehicles in the United States. HGTY is engaged in the underwriting, selling, and servicing collector car and enthusiast vehicle insurance policies.
HGTY also provides Hagerty Drivers Club memberships, which are primarily bundled with insurance policies and give subscribers access to an array of products and services, such as emergency roadside assistance, Hagerty Drivers Club magazine, automotive enthusiast events, a proprietary vehicle valuation tool, and special vehicle-related discounts. In addition, HGTY offers marketplace to complement insurance and membership offerings.
Hagerty has an expected revenue and earnings growth rate of 13.2% and 33.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.2% over the last 30 days.
HCI Group Inc.
Zacks Rank #2 HCI Group is engaged in property and casualty insurance, insurance management, reinsurance, real estate, and information technology businesses in Florida. HCI provides residential insurance products, such as homeowners, fire, flood, and wind-only insurance to homeowners, condominium owners, and tenants for properties, as well as offers reinsurance programs. HCI also owns and operates waterfront properties and retail shopping centers, and an office building, as well as commercial properties for investment purposes.
In addition, HCI designs and develops web-based applications and products for mobile devices, including SAMS, an online policy administration platform, Harmony, a policy administration platform, ClaimColony, an end-to-end claims management platform, and AtlasViewer, a mapping and data visualization platform.
HCI Group has an expected revenue and earnings growth rate of 18.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the last 30 days.
Palomar Holdings Inc.
Zacks Rank #1 Palomar Holdings’ focus on new business, strong premium retention rates for existing business and renewal of existing policies poise it well for growth. PLMR aims to be an industry leader in the crop business by 2025. PLMR should benefit from its solid product portfolio as well as geographic expansion and rate increases.
Net investment income is expected to grow on the back of a higher average balance of investments. PLMR raised adjusted net income guidance to a range of $186 million to $200 million in 2025, which includes $8-$12 million of additional catastrophe losses.
Yet, exposure to catastrophe loss induces underwriting volatility. PLMR strives to protect earnings and balance sheet, with its reinsurance program helping it to generate an improved combined ratio. High costs can strain margin expansion. PLMR estimates the loss ratio to be in the low 30s in 2025.
Palomar Holdings has an expected revenue and earnings growth rate of 42.3% and 36.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the last 30 days.
United Fire Group Inc.
Zacks Rank #2 United Fire Group provides property and casualty insurance for individuals and businesses in the United States. UFCS sells its products through a network of independent agencies.
UFCS’ commercial lines include fire and allied lines, other liability, automobile, workers' compensation, fidelity and surety coverage, and other insurance products, and personal lines comprise automobile, and fire and allied lines coverage, including assumed reinsurance for homeowners’ multi-peril coverage.
United Fire Group has an expected revenue and earnings growth rate of 6.7% and -2.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.6% over the last 30 days.