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4 Growth Stocks From the Insurance Space to Add to Your Portfolio
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Key Takeaways
Global commercial insurance rates fell 3% in the first quarter of 2025, per Marsh.
Despite recent pricing pressure, Deloitte projects global gross premiums to grow sixfold by 2030.
Insurers are investing heavily in technology to increase margins, efficiency, and operational scale.
The Zacks Insurance industry remains well-poised for growth, riding on better pricing, prudent underwriting and exposure growth. Redesigning and repricing of products and services to maintain sales and profitability, increased automation, prudent underwriting standards, and an improving rate environment are expected to drive premium growth and boost the industry’s efficiency.
Price Performance
The insurance industry has returned 5.9% in the year-to-date period, outperforming the Finance sector’s growth of 4.6% and the Zacks S&P 500 composite’s appreciation of 0.8%.
Image Source: Zacks Investment Research
Driving Forces
Global commercial insurance rates decreased 3%, on average, in the first quarter of 2025, which marked the third consecutive quarterly decrease following seven years of rising rates, per the Marsh Global Insurance Market Index.
Price hikes, operational strength, higher retention, strong renewal and the appointment of retail agents should help write higher premiums. Per Deloitte Insights, gross premiums are estimated to exceed $722 billion by 2030.
Non-life insurers are exposed to catastrophe losses and their profitability is vulnerable to the same. According to CoreLogic, the estimate for insurance market losses across residential and commercial exposures for the Eaton and Palisades Fires in Los Angeles is between $35 billion and $45 billion. Per Moody’s RMS Event Response, the insured losses for the January 2025 Los Angeles firestorm events are projected between $20 billion and $30 billion.
Higher catastrophe losses continue to provide impetus to policy renewal rates. MarketScout’s Market Barometer reports a 3% rise in commercial insurance rates and a 4.9% increase in personal lines in the first quarter of 2025. Price hikes, operational strength, higher retention, strong renewal and the appointment of retail agents should help write higher premiums. Per Deloitte Insights, gross premiums are estimated to increase sixfold to $722 billion by 2030.
Multiline insurers benefit from a diversified portfolio that lowers concentration risk. While higher demand for protection products benefits sales and premiums of life insurance operations, better pricing and increased exposure to intangibles and cyber threats support premium growth of non-life insurance operations. Per the 2024 global insurance outlook published in Financial Services, U.S. demand for catastrophe reinsurance is expected to grow, putting upward pressure on prices.
The insurance industry is rate-sensitive. An improving rate environment is a boon for insurers, especially long-tail insurers. The Fed kept the funds rate at 4.25-4.50% for a third consecutive meeting held in May 2025. With a large invested asset base, investment income should remain healthy, even if the Fed cuts rates later this year. Also, the insurance players are investing heavily in technology to improve scale and efficiency. This should help them generate higher margins and improve profitability.
A solid capital level supports insurers in pursuing strategic mergers and acquisitions to gain market share, expand in niche areas and diversify operations into new business lines and geography, as well as increase dividends, pay special dividends and buy back shares. According to PWC, the insurance deals market in 2025 is expected to be active considering the current macroeconomic environment. Per a report by Willis Towers Watson’s Quarterly Deal Performance Monitor, based on share price performance, companies making M&A deals outperformed the wider market by +1.5 percentage points for acquisitions that are valued more than $100 million completed between January and March 2025.
Players in the insurance industry are investing heavily in technology to expedite business operations. Increased use of blockchain, artificial intelligence, advanced analytics, telematics, cloud computing, Chatbot, RoboAdvisory, and insurtech solutions curbs costs and improves basis points, scale and efficiencies. Per the Deloitte FSI Predictions article, insurers are likely to generate around $4.7 billion in annual global premiums from AI-related insurance by 2032, yielding a CAGR of nearly 80%.
Given the bright prospects of the industry, growth stocks like EverQuote, Inc. (EVER - Free Report) , Horace Mann Educators Corporation (HMN - Free Report) , Root, Inc. (ROOT - Free Report) and HCI Group, Inc. (HCI - Free Report) , driven by their solid fundamentals, should generate better returns.
4 Growth Picks
Given the prospects of the industry, let’s look at a few stocks that have the potential to generate better returns. Our proprietary Growth Score makes the daunting task easier.
The Growth Score analyzes the growth prospects for a company. Studies have shown that stocks exhibiting the best growth characteristics consistently outperform the market. Back-tested results have shown that for stocks with a solid Growth Score and a favorable Zacks Rank, the returns are even better.
With the help of the Zacks Stock Screener, we have selected four insurance stocks with an impressive Growth Score of A or B. EVER, HMN and ROOT sport a Zacks Rank #1 (Strong Buy) each, while HCI carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
EverQuote, headquartered in Cambridge, MA, is an online insurance marketplace. The company's websites allow consumers to shop for auto, home, renters and life insurance. EVER is benefiting from its exclusive data assets and technology, a deepened focus on core P&C markets and a robust financial profile. It is also focused on streamlining traffic operations, boosting AI-powered bidding solutions and rolling out advanced agent technology platforms, which position it well for long-term growth. Recovery in automotive and other insurance verticals bodes well.
The Zacks Consensus Estimate for EVER’s 2025 and 2026 earnings suggests 32.9% and 19.9% year-over-year growth, respectively. The consensus estimate for 2026 has moved up 8.4% in the past 60 days. It surpassed earnings estimates in three of the last four quarters, the average beat being 122.56%. The stock currently has an impressive VGM Score of A.
Horace Mann Educators, headquartered in Springfield, IL, is the largest financial services company serving the U.S. educator market. Niche focus, improving product offerings, better pricing and a strengthened distribution model are likely to benefit first-quarter results. Earned premium growth ahead of loss cost growth is likely to have favored the combined ratio. Continued share buybacks are expected to have boosted the bottom line.
The Zacks Consensus Estimate for HMN’s 2025 and 2026 earnings suggests 26.1% and 10.3% year-over-year growth, respectively. The consensus estimate for 2025 and 2026 has moved up 5.5% and 4.7%, respectively, in the past 60 days. It surpassed earnings estimates in three of the last four quarters and matched in one, the average beat being 24.09%. Earnings have grown 8.7% in the past five years. The stock currently has a Value Score of A and an impressive VGM Score of A.
Root, headquartered in Columbus, OH, provides insurance products and services in the United States. ROOT offers automobile, homeowners and renters’ insurance products. ROOT operates a direct-to-consumer mode and serves customers primarily through mobile applications, as well as through its website. ROOT’s direct distribution channels also cover digital, media and referral channels, as well as distribution partners and agencies.
The Zacks Consensus Estimate for Root’s 2025 and 2026 revenues suggests 17.3% and 8.6% year-over-year growth, respectively, while the estimate for Root’s 2026 earnings suggests 54% year-over-year growth. It delivered a four-quarter average earnings surprise of 208.89%. The consensus estimate for 2025 and 2026 has moved up 516% and 94.3%, respectively, in the past 60 days.
HCI Group, headquartered in Tampa, FL, is a holding company that conducts its business activities through its subsidiaries. HCI is engaged in diverse business activities, including property and casualty insurance, information technology, real estate and reinsurance. HCI provides property and casualty insurance. HCI’s insurance product includes property and casualty homeowners’ insurance, condominium-owners' insurance and tenants’ insurance for individuals owning property.
The Zacks Consensus Estimate for HCI’s 2025 and 2026 revenues suggests 18.3% and 5.9% year-over-year growth, respectively, while the estimate for HCI’s 2025 earnings suggests 109.7% year-over-year growth. The consensus estimate for 2025 and 2026 has moved up 3.7% and 13%, respectively, in the past 60 days. It delivered a four-quarter average earnings surprise of 42.13%. Earnings have grown 19% in the past five years. The stock currently has a Value Score of A and an impressive VGM Score of A.
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4 Growth Stocks From the Insurance Space to Add to Your Portfolio
Key Takeaways
The Zacks Insurance industry remains well-poised for growth, riding on better pricing, prudent underwriting and exposure growth. Redesigning and repricing of products and services to maintain sales and profitability, increased automation, prudent underwriting standards, and an improving rate environment are expected to drive premium growth and boost the industry’s efficiency.
Price Performance
The insurance industry has returned 5.9% in the year-to-date period, outperforming the Finance sector’s growth of 4.6% and the Zacks S&P 500 composite’s appreciation of 0.8%.
Image Source: Zacks Investment Research
Driving Forces
Global commercial insurance rates decreased 3%, on average, in the first quarter of 2025, which marked the third consecutive quarterly decrease following seven years of rising rates, per the Marsh Global Insurance Market Index.
Price hikes, operational strength, higher retention, strong renewal and the appointment of retail agents should help write higher premiums. Per Deloitte Insights, gross premiums are estimated to exceed $722 billion by 2030.
Non-life insurers are exposed to catastrophe losses and their profitability is vulnerable to the same. According to CoreLogic, the estimate for insurance market losses across residential and commercial exposures for the Eaton and Palisades Fires in Los Angeles is between $35 billion and $45 billion. Per Moody’s RMS Event Response, the insured losses for the January 2025 Los Angeles firestorm events are projected between $20 billion and $30 billion.
Higher catastrophe losses continue to provide impetus to policy renewal rates. MarketScout’s Market Barometer reports a 3% rise in commercial insurance rates and a 4.9% increase in personal lines in the first quarter of 2025. Price hikes, operational strength, higher retention, strong renewal and the appointment of retail agents should help write higher premiums. Per Deloitte Insights, gross premiums are estimated to increase sixfold to $722 billion by 2030.
Multiline insurers benefit from a diversified portfolio that lowers concentration risk. While higher demand for protection products benefits sales and premiums of life insurance operations, better pricing and increased exposure to intangibles and cyber threats support premium growth of non-life insurance operations. Per the 2024 global insurance outlook published in Financial Services, U.S. demand for catastrophe reinsurance is expected to grow, putting upward pressure on prices.
The insurance industry is rate-sensitive. An improving rate environment is a boon for insurers, especially long-tail insurers. The Fed kept the funds rate at 4.25-4.50% for a third consecutive meeting held in May 2025. With a large invested asset base, investment income should remain healthy, even if the Fed cuts rates later this year. Also, the insurance players are investing heavily in technology to improve scale and efficiency. This should help them generate higher margins and improve profitability.
A solid capital level supports insurers in pursuing strategic mergers and acquisitions to gain market share, expand in niche areas and diversify operations into new business lines and geography, as well as increase dividends, pay special dividends and buy back shares. According to PWC, the insurance deals market in 2025 is expected to be active considering the current macroeconomic environment. Per a report by Willis Towers Watson’s Quarterly Deal Performance Monitor, based on share price performance, companies making M&A deals outperformed the wider market by +1.5 percentage points for acquisitions that are valued more than $100 million completed between January and March 2025.
Players in the insurance industry are investing heavily in technology to expedite business operations. Increased use of blockchain, artificial intelligence, advanced analytics, telematics, cloud computing, Chatbot, RoboAdvisory, and insurtech solutions curbs costs and improves basis points, scale and efficiencies. Per the Deloitte FSI Predictions article, insurers are likely to generate around $4.7 billion in annual global premiums from AI-related insurance by 2032, yielding a CAGR of nearly 80%.
Given the bright prospects of the industry, growth stocks like EverQuote, Inc. (EVER - Free Report) , Horace Mann Educators Corporation (HMN - Free Report) , Root, Inc. (ROOT - Free Report) and HCI Group, Inc. (HCI - Free Report) , driven by their solid fundamentals, should generate better returns.
4 Growth Picks
Given the prospects of the industry, let’s look at a few stocks that have the potential to generate better returns. Our proprietary Growth Score makes the daunting task easier.
The Growth Score analyzes the growth prospects for a company. Studies have shown that stocks exhibiting the best growth characteristics consistently outperform the market. Back-tested results have shown that for stocks with a solid Growth Score and a favorable Zacks Rank, the returns are even better.
With the help of the Zacks Stock Screener, we have selected four insurance stocks with an impressive Growth Score of A or B. EVER, HMN and ROOT sport a Zacks Rank #1 (Strong Buy) each, while HCI carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
EverQuote, headquartered in Cambridge, MA, is an online insurance marketplace. The company's websites allow consumers to shop for auto, home, renters and life insurance. EVER is benefiting from its exclusive data assets and technology, a deepened focus on core P&C markets and a robust financial profile. It is also focused on streamlining traffic operations, boosting AI-powered bidding solutions and rolling out advanced agent technology platforms, which position it well for long-term growth. Recovery in automotive and other insurance verticals bodes well.
The Zacks Consensus Estimate for EVER’s 2025 and 2026 earnings suggests 32.9% and 19.9% year-over-year growth, respectively. The consensus estimate for 2026 has moved up 8.4% in the past 60 days. It surpassed earnings estimates in three of the last four quarters, the average beat being 122.56%. The stock currently has an impressive VGM Score of A.
Horace Mann Educators, headquartered in Springfield, IL, is the largest financial services company serving the U.S. educator market. Niche focus, improving product offerings, better pricing and a strengthened distribution model are likely to benefit first-quarter results. Earned premium growth ahead of loss cost growth is likely to have favored the combined ratio. Continued share buybacks are expected to have boosted the bottom line.
The Zacks Consensus Estimate for HMN’s 2025 and 2026 earnings suggests 26.1% and 10.3% year-over-year growth, respectively. The consensus estimate for 2025 and 2026 has moved up 5.5% and 4.7%, respectively, in the past 60 days. It surpassed earnings estimates in three of the last four quarters and matched in one, the average beat being 24.09%. Earnings have grown 8.7% in the past five years. The stock currently has a Value Score of A and an impressive VGM Score of A.
Root, headquartered in Columbus, OH, provides insurance products and services in the United States. ROOT offers automobile, homeowners and renters’ insurance products. ROOT operates a direct-to-consumer mode and serves customers primarily through mobile applications, as well as through its website. ROOT’s direct distribution channels also cover digital, media and referral channels, as well as distribution partners and agencies.
The Zacks Consensus Estimate for Root’s 2025 and 2026 revenues suggests 17.3% and 8.6% year-over-year growth, respectively, while the estimate for Root’s 2026 earnings suggests 54% year-over-year growth. It delivered a four-quarter average earnings surprise of 208.89%. The consensus estimate for 2025 and 2026 has moved up 516% and 94.3%, respectively, in the past 60 days.
HCI Group, headquartered in Tampa, FL, is a holding company that conducts its business activities through its subsidiaries. HCI is engaged in diverse business activities, including property and casualty insurance, information technology, real estate and reinsurance. HCI provides property and casualty insurance. HCI’s insurance product includes property and casualty homeowners’ insurance, condominium-owners' insurance and tenants’ insurance for individuals owning property.
The Zacks Consensus Estimate for HCI’s 2025 and 2026 revenues suggests 18.3% and 5.9% year-over-year growth, respectively, while the estimate for HCI’s 2025 earnings suggests 109.7% year-over-year growth. The consensus estimate for 2025 and 2026 has moved up 3.7% and 13%, respectively, in the past 60 days. It delivered a four-quarter average earnings surprise of 42.13%. Earnings have grown 19% in the past five years. The stock currently has a Value Score of A and an impressive VGM Score of A.