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4 P&C Insurance Stocks That Have Gained More Than 25% YTD
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Key Takeaways
Global commercial insurance rates fell 3% in Q1 2025, per Marsh.
Deloitte projects global gross premiums to grow sixfold to $722 billion by 2030, fueled by high retention.
The Fed held rates steady at 4.25-4.50% for the fourth straight meeting in June 2025.
The Zacks Property and Casualty Insurance industry has performed well so far this year, riding on better pricing, prudent underwriting standards, increased exposure, streamlined operations, a wider global presence and a solid capital position. Increased technology advancements and an improving rate environment have added to the upside.
Banking on strong fundamentals and benefiting from a favorable macro backdrop, Heritage Insurance Holdings, Inc. (HRTG - Free Report) , PalomarHoldings, Inc. (PLMR - Free Report) , Root, Inc. (ROOT - Free Report) and HCI Group, Inc. (HCI - Free Report) have not only outperformed the industry but also crushed the Zacks S&P 500 composite and the Finance sector.
Price Performance
The insurance industry has outperformed the Zacks S&P 500 composite in the year-to-date period. The insurance industry has risen 7.1%, outperforming the Zacks S&P 500 composite’s growth of 4.4% in the said time frame. Meanwhile, the Finance sector has rallied 7.8% in the said time frame.
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.
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 fourth consecutive meeting held in June 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%.
Picks for Better Returns
With the help of the Zacks Stock Screener, we have selected four insurance stocks that have rallied more than 25% year to date. These stocks have delivered earnings surprises in each of the last four reported quarters and witnessed northbound estimate revisions.
Heritage Insurance: HRTG offers personal residential insurance, commercial residential insurance for properties and personal residential and wind-only property insurance, licensed in the state of Pennsylvania. Its growing commercial residential business, expanding the excess and supply (E&S) business and improving pricing are expected to deliver better margins and boost earnings. Rate adequacy, selective profit-oriented underwriting criteria and restricting new business in over-concentrated markets or products should drive profitability for Heritage Insurance.
The E&S business is another growth lever for Heritage. HRTG stated that it will consider and evaluate growth opportunities in a greater number of states.
The Zacks Consensus Estimate for HRTG’s 2025 and 2026 revenues suggests 4.6% and 7.3% year-over-year growth, respectively, while the estimate for HRTG’s 2025 and 2026 earnings suggests 61.6% and 13.2% year-over-year growth, respectively. The consensus estimate for 2025 and 2026 has moved up 33.7% and 17.5%, respectively, in the past 60 days. Earnings have grown 17.6% in the past five years. The company delivered an earnings surprise of 363.17%, on average, in the trailing four quarters.
Palomar Holdings: Palomar is a rapidly growing and profitable company focused on the provision of catastrophe insurance for personal and commercial property. Focus on new business, strong premium retention rates for existing business and renewal of existing policies, strategic expansion of geographic and distribution footprint and new partnerships, combined with better pricing, positions it well for growth. PLMR should benefit from its solid product portfolio as well as geographic expansion and rate increases. PLMR’s net investment income is expected to grow on the back of a higher average balance of investments. Higher return on capital indicates efficient utilization of shareholders’ value. Palomar raised adjusted net income guidance to a range of $186 million to $200 million in 2025.
The Zacks Consensus Estimate for PLMR’s 2025 and 2026 revenues suggests 42.5% and 26.3% year-over-year growth, respectively, while the estimate for 2025 and 2026 earnings suggests 39.2% and 17% year-over-year growth, respectively. It has a Growth Score of B. The consensus estimate for 2025 and 2026 has moved up 2% and 1.5%, respectively, in the past 30 days. The company delivered an earnings surprise of 16.42%, on average, in the trailing four quarters.
PLMR sports a Zacks Rank #1, and its shares have rallied 45.3% year to date.
Root: It 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.
Root sports a Zacks Rank #1, and its shares have rallied 76.7% year to date.
HCI Group: It 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.
HCI carries a Zacks Rank #2 (Buy) at present, and its shares have rallied 29.7% year to date.
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4 P&C Insurance Stocks That Have Gained More Than 25% YTD
Key Takeaways
The Zacks Property and Casualty Insurance industry has performed well so far this year, riding on better pricing, prudent underwriting standards, increased exposure, streamlined operations, a wider global presence and a solid capital position. Increased technology advancements and an improving rate environment have added to the upside.
Banking on strong fundamentals and benefiting from a favorable macro backdrop, Heritage Insurance Holdings, Inc. (HRTG - Free Report) , Palomar Holdings, Inc. (PLMR - Free Report) , Root, Inc. (ROOT - Free Report) and HCI Group, Inc. (HCI - Free Report) have not only outperformed the industry but also crushed the Zacks S&P 500 composite and the Finance sector.
Price Performance
The insurance industry has outperformed the Zacks S&P 500 composite in the year-to-date period. The insurance industry has risen 7.1%, outperforming the Zacks S&P 500 composite’s growth of 4.4% in the said time frame. Meanwhile, the Finance sector has rallied 7.8% in the said time frame.
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.
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 fourth consecutive meeting held in June 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%.
Picks for Better Returns
With the help of the Zacks Stock Screener, we have selected four insurance stocks that have rallied more than 25% year to date. These stocks have delivered earnings surprises in each of the last four reported quarters and witnessed northbound estimate revisions.
Heritage Insurance: HRTG offers personal residential insurance, commercial residential insurance for properties and personal residential and wind-only property insurance, licensed in the state of Pennsylvania. Its growing commercial residential business, expanding the excess and supply (E&S) business and improving pricing are expected to deliver better margins and boost earnings. Rate adequacy, selective profit-oriented underwriting criteria and restricting new business in over-concentrated markets or products should drive profitability for Heritage Insurance.
The E&S business is another growth lever for Heritage. HRTG stated that it will consider and evaluate growth opportunities in a greater number of states.
The Zacks Consensus Estimate for HRTG’s 2025 and 2026 revenues suggests 4.6% and 7.3% year-over-year growth, respectively, while the estimate for HRTG’s 2025 and 2026 earnings suggests 61.6% and 13.2% year-over-year growth, respectively. The consensus estimate for 2025 and 2026 has moved up 33.7% and 17.5%, respectively, in the past 60 days. Earnings have grown 17.6% in the past five years. The company delivered an earnings surprise of 363.17%, on average, in the trailing four quarters.
Heritage Insurance currently flaunts a Zacks Rank #1 (Strong Buy) and has a Value Score of B. Shares of HRTG have rallied 93.6% in the year-to-date period. You can see the complete list of today’s Zacks #1 Rank stocks here.
Palomar Holdings: Palomar is a rapidly growing and profitable company focused on the provision of catastrophe insurance for personal and commercial property. Focus on new business, strong premium retention rates for existing business and renewal of existing policies, strategic expansion of geographic and distribution footprint and new partnerships, combined with better pricing, positions it well for growth.
PLMR should benefit from its solid product portfolio as well as geographic expansion and rate increases. PLMR’s net investment income is expected to grow on the back of a higher average balance of investments. Higher return on capital indicates efficient utilization of shareholders’ value. Palomar raised adjusted net income guidance to a range of $186 million to $200 million in 2025.
The Zacks Consensus Estimate for PLMR’s 2025 and 2026 revenues suggests 42.5% and 26.3% year-over-year growth, respectively, while the estimate for 2025 and 2026 earnings suggests 39.2% and 17% year-over-year growth, respectively. It has a Growth Score of B. The consensus estimate for 2025 and 2026 has moved up 2% and 1.5%, respectively, in the past 30 days. The company delivered an earnings surprise of 16.42%, on average, in the trailing four quarters.
PLMR sports a Zacks Rank #1, and its shares have rallied 45.3% year to date.
Root: It 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.
Root sports a Zacks Rank #1, and its shares have rallied 76.7% year to date.
HCI Group: It 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.
HCI carries a Zacks Rank #2 (Buy) at present, and its shares have rallied 29.7% year to date.