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3 P&C Insurance Stocks That Have Outperformed the S&P 500 in a Year
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Key Takeaways
Global commercial insurance rates declined 5% in Q1 2026 amid ample capacity and strong competition.
Higher bond yields, larger investment portfolios and strong cash flow likely supported insurers' income.
Technology investments and solid capital positions are aiding efficiency, M&A and shareholder returns.
The Zacks Property and Casualty Insurance industry is placed within the top 36% of the 243 Zacks industries. It currently carries a Zacks Industry Rank #87. Insurers remain well-poised for growth, riding on better pricing, prudent underwriting, increased exposure, an improving rate environment, a solid capital position and ongoing economic expansion.
Price Performance
Though the property and casualty (P&C) insurance industry has lost 3.6% in the past year against the Finance sector’s growth of 13.3% and the Zacks S&P 500 composite’s return of 33.1%, here are three P&C insurance stocks that have outperformed in the past year, riding on strong fundamentals.
Stocks like United Fire Group, Inc. (UFCS - Free Report) , Universal Insurance Holdings, Inc. (UVE - Free Report) and Mercury General Corporation (MCY - Free Report) have not only crushed the S&P 500 composite but also outperformed their respective industries and sectors over the past year. These stocks are poised to maintain the rally, given their solid prospects.
Image Source: Zacks Investment Research
Driving Forces
Global commercial insurance rates declined, on average, by 5% in the first quarter of 2026, following a 4% decline in fourth-quarter 2025. This marked the seventh consecutive quarter of rate decreases, per the Marsh Global Insurance Market Index. The downward rate movement continues to be driven by abundant capacity and intense insurer competition across most major product lines, 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.
Aon has estimated that global insured catastrophe losses amounted to at least $20 billion in the first quarter of 2026, 6% above the 21st-century average. Aon’s report also noted that natural catastrophes in the United States accounted for more than 75% of global insured losses in the first quarter of 2026, reaching around $16 billion.
Per Gallagher Re, global natural catastrophe events in the first quarter of 2026 resulted in an estimated $58 billion in direct economic losses. Per Gallagher Re, in the first quarter of 2026, global and regional natural catastrophe activity and loss totals were comparatively lower than the first three months of previous years.
Underwriting profit is likely to have benefited from better pricing, reinsurance arrangements, portfolio repositioning, reinsurance covers and favorable reserve development.
The Fed left the federal funds rate steady at the 3.5-3.75% target range for a second consecutive meeting in March 2026, in line with expectations. The Fed still projects a single rate cut in 2026, but also expects inflation and economic growth to rise from its previous projections.
A larger investment asset base, strong cash flow from operating activities, higher bond yields, and an increase in interest income from fixed-maturity securities are expected to have aided net investment income.
The insurance industry’s increased use of technology like blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation expedites business operations. Insurers continue to invest heavily in technology to improve basis points, scale and efficiencies. These investments are likely to have curbed costs and aided the margins of insurers in the first quarter.
A solid capital position is likely to have aided insurers in strategic mergers and acquisitions to sharpen their competitive edge, expand geographically and diversify their portfolio. Sustained wealth distribution to shareholders via dividend hikes, special dividends and share repurchases instill confidence in the insurers.
3 Insurers to Watch
With the help of the Zacks Stock Screener, we have selected three insurance stocks with an impressive Value Score of A. The stocks mentioned below either carry a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) at present. Back-tested results have shown that for stocks with a solid Value Score and a favorable Zacks Rank, the returns are even better. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Fire Group: United Fire Group, headquartered in Cedar Rapids, Iowa, engages in writing property and casualty insurance in the United States. UFCS sells its products through a network of independent agencies. With a portfolio offering a wide range of products, including property, casualty, commercial lines, specialty lines and surety bonds, United Fire Group has a strong presence in the Midwestern U.S. This also exposes the insurer to geographic concentration. Core commercial new business production is growing as small businesses, construction, and the middle market are collectively contributing. Prudent pricing and risk selection, stable retention and higher new business should drive premiums.
Continued increase in fixed maturity income from a growing fixed income portfolio drives net investment income. This also shields the company from increased uncertainty. Investments in technology to streamline operations, improve data analysis and enhance customer experience should support long-term growth.
The Zacks Consensus Estimate for United Fire’s 2026 earnings per share indicates a year-over-year increase of 6.1%. The consensus estimate for revenues is pegged at $1.53 billion, implying a year-over-year improvement of 10.5%.
The consensus estimate for 2027 earnings and revenues indicates an increase of 1.4% and 9.6%, respectively, from the 2026 estimates. The consensus estimate for 2026 and 2027 has moved 33.7% and 34% north, respectively, in the past 30 days. United Fire delivered a four-quarter average earnings surprise of 68.82%. UFCS’s shares have rallied 69.7% in the past year.
The company’s return on equity in the trailing 12 months was 14.6%, better than the industry average of 7.4%.
Universal Insurance Holdings: Universal Insurance, headquartered in Fort Lauderdale, FL, operates as an integrated insurance holding company in the United States. UVE is set to gain from Florida’s improving post-reform loss environment, while its disciplined underwriting strategy continues to support strong unit economics and selective growth opportunities. The company recently completed its 2026–2027 reinsurance renewal and added multi-year protection extending into the 2027–2028 treaty period, enhancing earnings visibility ahead of upcoming hurricane seasons. Healthy policy retention, selective market positioning and steady policy growth should support profitable expansion. Strong capital levels, along with dividends and share repurchases, provide added downside protection.
The Zacks Consensus Estimate for Universal Insurance’s 2027 revenues indicates an increase of 1.5% from the 2026 estimates.
The consensus estimate for 2026 and 2027 has moved 18.7% and 10% north, respectively, in the past 30 days. The company’s earnings have improved 79.6% in the past five years, better than the industry average of 22.3%. Mercury General delivered a four-quarter average earnings surprise of 36.82%. UVE’s shares have rallied 48.2% in the past year.
The company’s return on equity in the trailing 12 months was 37.5%, better than the industry average of 7.4%.
Mercury General: Headquartered in Los Angeles, Mercury General is an insurance holding company. It is primarily engaged in writing personal automobile lines of business and provides related property and casualty insurance products. Mercury General has been gaining ground by relying on a set of core organic strengths. The Property and Casualty segment has also held up well, signaling a stable backdrop for the company’s operations. These organic drivers are lifting Mercury General’s top line and shaping the path for continued expansion. Mercury General’s strong liquidity position further supports its growth.
The Zacks Consensus Estimate for Mercury General’s 2026 earnings per share indicates a year-over-year increase of 48.7%. The consensus estimate for revenues is pegged at $6.38 billion, implying a year-over-year improvement of 8.5%.
The consensus estimate for 2027 earnings and revenues indicates an increase of 2.1% and 5.7%, respectively, from the 2026 estimates. The consensus estimate for 2026 and 2027 has moved 30.5% and 50% north, respectively, in the past 30 days. The company’s earnings have improved 16.4% in the past five years. Mercury General delivered a four-quarter average earnings surprise of 61.76%. MCY’s shares have rallied 69% in the past year.
The company’s return on equity over the trailing 12 months was 32.9%, exceeding the industry average of 7.4%.
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3 P&C Insurance Stocks That Have Outperformed the S&P 500 in a Year
Key Takeaways
The Zacks Property and Casualty Insurance industry is placed within the top 36% of the 243 Zacks industries. It currently carries a Zacks Industry Rank #87. Insurers remain well-poised for growth, riding on better pricing, prudent underwriting, increased exposure, an improving rate environment, a solid capital position and ongoing economic expansion.
Price Performance
Though the property and casualty (P&C) insurance industry has lost 3.6% in the past year against the Finance sector’s growth of 13.3% and the Zacks S&P 500 composite’s return of 33.1%, here are three P&C insurance stocks that have outperformed in the past year, riding on strong fundamentals.
Stocks like United Fire Group, Inc. (UFCS - Free Report) , Universal Insurance Holdings, Inc. (UVE - Free Report) and Mercury General Corporation (MCY - Free Report) have not only crushed the S&P 500 composite but also outperformed their respective industries and sectors over the past year. These stocks are poised to maintain the rally, given their solid prospects.
Image Source: Zacks Investment Research
Driving Forces
Global commercial insurance rates declined, on average, by 5% in the first quarter of 2026, following a 4% decline in fourth-quarter 2025. This marked the seventh consecutive quarter of rate decreases, per the Marsh Global Insurance Market Index. The downward rate movement continues to be driven by abundant capacity and intense insurer competition across most major product lines, 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.
Aon has estimated that global insured catastrophe losses amounted to at least $20 billion in the first quarter of 2026, 6% above the 21st-century average. Aon’s report also noted that natural catastrophes in the United States accounted for more than 75% of global insured losses in the first quarter of 2026, reaching around $16 billion.
Per Gallagher Re, global natural catastrophe events in the first quarter of 2026 resulted in an estimated $58 billion in direct economic losses. Per Gallagher Re, in the first quarter of 2026, global and regional natural catastrophe activity and loss totals were comparatively lower than the first three months of previous years.
Underwriting profit is likely to have benefited from better pricing, reinsurance arrangements, portfolio repositioning, reinsurance covers and favorable reserve development.
The Fed left the federal funds rate steady at the 3.5-3.75% target range for a second consecutive meeting in March 2026, in line with expectations. The Fed still projects a single rate cut in 2026, but also expects inflation and economic growth to rise from its previous projections.
A larger investment asset base, strong cash flow from operating activities, higher bond yields, and an increase in interest income from fixed-maturity securities are expected to have aided net investment income.
The insurance industry’s increased use of technology like blockchain, artificial intelligence, advanced analytics, telematics, cloud computing and robotic process automation expedites business operations. Insurers continue to invest heavily in technology to improve basis points, scale and efficiencies. These investments are likely to have curbed costs and aided the margins of insurers in the first quarter.
A solid capital position is likely to have aided insurers in strategic mergers and acquisitions to sharpen their competitive edge, expand geographically and diversify their portfolio. Sustained wealth distribution to shareholders via dividend hikes, special dividends and share repurchases instill confidence in the insurers.
3 Insurers to Watch
With the help of the Zacks Stock Screener, we have selected three insurance stocks with an impressive Value Score of A. The stocks mentioned below either carry a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) at present. Back-tested results have shown that for stocks with a solid Value Score and a favorable Zacks Rank, the returns are even better. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Fire Group: United Fire Group, headquartered in Cedar Rapids, Iowa, engages in writing property and casualty insurance in the United States. UFCS sells its products through a network of independent agencies. With a portfolio offering a wide range of products, including property, casualty, commercial lines, specialty lines and surety bonds, United Fire Group has a strong presence in the Midwestern U.S. This also exposes the insurer to geographic concentration. Core commercial new business production is growing as small businesses, construction, and the middle market are collectively contributing. Prudent pricing and risk selection, stable retention and higher new business should drive premiums.
Continued increase in fixed maturity income from a growing fixed income portfolio drives net investment income. This also shields the company from increased uncertainty. Investments in technology to streamline operations, improve data analysis and enhance customer experience should support long-term growth.
The Zacks Consensus Estimate for United Fire’s 2026 earnings per share indicates a year-over-year increase of 6.1%. The consensus estimate for revenues is pegged at $1.53 billion, implying a year-over-year improvement of 10.5%.
The consensus estimate for 2027 earnings and revenues indicates an increase of 1.4% and 9.6%, respectively, from the 2026 estimates.
The consensus estimate for 2026 and 2027 has moved 33.7% and 34% north, respectively, in the past 30 days. United Fire delivered a four-quarter average earnings surprise of 68.82%. UFCS’s shares have rallied 69.7% in the past year.
The company’s return on equity in the trailing 12 months was 14.6%, better than the industry average of 7.4%.
Universal Insurance Holdings: Universal Insurance, headquartered in Fort Lauderdale, FL, operates as an integrated insurance holding company in the United States. UVE is set to gain from Florida’s improving post-reform loss environment, while its disciplined underwriting strategy continues to support strong unit economics and selective growth opportunities. The company recently completed its 2026–2027 reinsurance renewal and added multi-year protection extending into the 2027–2028 treaty period, enhancing earnings visibility ahead of upcoming hurricane seasons. Healthy policy retention, selective market positioning and steady policy growth should support profitable expansion. Strong capital levels, along with dividends and share repurchases, provide added downside protection.
The Zacks Consensus Estimate for Universal Insurance’s 2027 revenues indicates an increase of 1.5% from the 2026 estimates.
The consensus estimate for 2026 and 2027 has moved 18.7% and 10% north, respectively, in the past 30 days. The company’s earnings have improved 79.6% in the past five years, better than the industry average of 22.3%. Mercury General delivered a four-quarter average earnings surprise of 36.82%. UVE’s shares have rallied 48.2% in the past year.
The company’s return on equity in the trailing 12 months was 37.5%, better than the industry average of 7.4%.
Mercury General: Headquartered in Los Angeles, Mercury General is an insurance holding company. It is primarily engaged in writing personal automobile lines of business and provides related property and casualty insurance products. Mercury General has been gaining ground by relying on a set of core organic strengths. The Property and Casualty segment has also held up well, signaling a stable backdrop for the company’s operations. These organic drivers are lifting Mercury General’s top line and shaping the path for continued expansion. Mercury General’s strong liquidity position further supports its growth.
The Zacks Consensus Estimate for Mercury General’s 2026 earnings per share indicates a year-over-year increase of 48.7%. The consensus estimate for revenues is pegged at $6.38 billion, implying a year-over-year improvement of 8.5%.
The consensus estimate for 2027 earnings and revenues indicates an increase of 2.1% and 5.7%, respectively, from the 2026 estimates.
The consensus estimate for 2026 and 2027 has moved 30.5% and 50% north, respectively, in the past 30 days. The company’s earnings have improved 16.4% in the past five years. Mercury General delivered a four-quarter average earnings surprise of 61.76%. MCY’s shares have rallied 69% in the past year.
The company’s return on equity over the trailing 12 months was 32.9%, exceeding the industry average of 7.4%.