The Zacks Property and Casualty Insurance industry is placed within the top 29% of the 245 Zacks industries. It currently carries Zack Industry Rank #72. The 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. 

The property and casualty (P&C) insurance industry has lost 4.1% in the past year compared with the Zacks S&P 500 composite and the Finance sector’s growth of 31% and 12.9%, respectively.

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Driving Forces

Global commercial insurance rates declined, on average, by 5% in the first quarter of 2026, following a 4% decline in the fourth quarter of 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.

Given the bright prospects of the industry, growth stocks like Mercury General Corporation (MCY Quick QuoteMCY - Free Report) , Cincinnati Financial Corporation (CINF Quick QuoteCINF - Free Report) and The Travelers Companies, Inc. (TRV Quick QuoteTRV - Free Report) , driven by their solid fundamentals, should generate better returns.

3 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 three P&C insurance stocks with an impressive Growth Score of A or B. MCY sports a Zacks Rank #1 (Strong Buy), while CINF and TRV carry a Zacks Rank #3 (Hold) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Los Angeles, CA, Mercury General is a leading provider of personal automobile insurance and is engaged primarily in writing all risk classifications of automobile insurance in a number of states. MCY offers automobile policyholders the following types of coverage: bodily injury liability, underinsured and uninsured motorist, property damage liability, comprehensive, collision and other hazards specified in the policy.

The Zacks Consensus Estimate for MCY’s 2026 and 2027 earnings suggests 48.7% and 2.1% year-over-year growth, respectively. The consensus estimate for 2026 and 2027 has moved up 30.5% and 50%, respectively, in the past 30 days. The company delivered a four-quarter average earnings surprise of 61.76%. MCY also has an impressive Value Score of A. The earnings of Mercury General grew 16.4% in the last five years.

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.

The Zacks Consensus Estimate for TRV’s 2026 and 2027 earnings suggests 1.6% and 1.18% year-over-year growth, respectively. The consensus estimate for 2026 and 2027 has moved up 0.7% and 0.1%, respectively, in the past 30 days. The company delivered a four-quarter average earnings surprise of 40.38%. TRV also has an impressive Value Score of A. The earnings of Travelers Companies grew 16.4% in the last five years.

Headquarters in Fairfield, OH, Cincinnati Financial markets property and casualty insurance. Cincinnati Financial continues to grow on better pricing, strong renewal, solid retention, exposure growth and a disciplined expansion of Cincinnati Re, which is making a nice contribution to its overall earnings. The company intends to grow the commercial lines segment through additional agency appointments, expansion of local field presence, enhanced expertise and a robust product catalog. 

The Zacks Consensus Estimate for CINF’s 2026 and 2027 earnings suggests 8.3% and 4.1% year-over-year growth, respectively. The consensus estimate for 2026 has moved up 2.6% in the past 30 days. The company delivered a four-quarter average earnings surprise of 27.54%. CINF also has an impressive Value Score of B. The earnings of Cincinnati Financial grew 11.3% in the last five years.