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Watch These 4 Insurance Stocks for Q2 Earnings: Beat or Miss?
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Key Takeaways
Better pricing, retention and exposure growth likely supported premium growth across insurance lines.
Catastrophe losses, investment income and underwriting trends remain key factors shaping Q2 results.
Technology investments, solid capital and shareholder return continue to support insurers' long-term outlook.
Continued improved pricing, exposure growth, portfolio streamlining, solid retention, renewals, reinsurance agreements and accelerated digitalization are expected to have enhanced insurance stocks’ June-quarter performance. However, catastrophe losses are likely to have weighed on the upside. Insurers yet to report their second-quarter results on Aug. 4 are Mercury General Corporation (MCY - Free Report) , Assurant, Inc. (AIZ - Free Report) , Prudential Financial, Inc. (PRU - Free Report) and American Financial Group, Inc. (AFG - Free Report) .
The insurance space is housed within the broader Finance sector (one of the 16 broad Zacks sectors within the Zacks Industry classification). Per the latest Earnings Preview, the total earnings of finance companies for the second quarter are anticipated to rise 22.9% from the prior-year quarter’s figure. These companies’ revenues are anticipated to improve 12%.
Factors Likely to Shape Insurers’ Performance in Q2
Better pricing, solid retention and exposure growth across business lines are likely to have driven premiums. Per the latest Marsh Global Insurance Market Index, in the second quarter of 2026, Global insurance rates declined 6%, marking the eighth consecutive quarter of reductions and extending favorable conditions for buyers across most regions and major product lines. Property rates reduced by 12% while casualty rates increased 2%, driven largely by continued challenges in the United States.
Aon has estimated a pre-tax catastrophe loss of $1.72 billion, indicating a heavy start for the annual aggregate year for the company’s catastrophe bonds. Goldman Sachs estimates global insured catastrophe losses at approximately $24 billion. Per Goldman Sachs, the estimate of $24 billion represents approximately 65-70% of the five-year quarterly average.
Underwriting profit is likely to have benefited from better pricing, reinsurance arrangements, portfolio repositioning, reinsurance covers and favorable reserve development.
Auto premiums are likely to have improved, given increased travel across the world.
The U.S. Federal Reserve projected to hold the federal funds rate steady in the 3.50% to 3.75% range through the end of 2026. For year-end 2026, the Fed projected one quarter-point rate hike and five projected half-point rate hikes.
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 second 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 instills confidence in the insurers.
Let’s find out how the following insurers are placed before their second-quarter 2026 results on Aug. 4.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Per our proprietary model, the combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Mercury General: Mercury General's second-quarter results are likely to benefit from continued growth in net premiums earned, driven by previously approved rate increases, disciplined underwriting and an increase in policies written, particularly in the California private passenger automobile business. Rate increases in the California homeowners line are also expected to have supported earned premiums. Net investment income is expected to have increased, supported by higher reinvestment yields and growth in invested assets amid a favorable interest rate environment. Disciplined underwriting, favorable pricing actions and prior-year reserve development are expected to have supported underwriting profitability and the combined ratio.
Assurant: Solid performance in the Global Housing segment, as well as growth in Global Lifestyle, is likely to have aided Assurant's second-quarter performance. Revenues are likely to have increased due to improved net earned premiums and higher net investment income. Net earned premiums are expected to have benefited from higher premiums in the Global Housing and Global Lifestyle segments.
Global Housing is expected to have been driven by Homeowners from higher lender-placed policies in force and average premiums and growth across various specialty products, as well as growth in Renters and Other, primarily from the prior year acquisition of a block of renters policies. Global Lifestyle is likely to have benefited from Connected Living growth from global mobile device protection programs, extended service contracts, including a recently launched U.S. program, and card benefits programs in financial services.
The Zacks Consensus Estimate for the bottom line is pegged at $5.16, indicating a 7.1% decrease from the year-ago quarter’s reported figure. The company has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. (Read more: Assurant Set to Report Q2 Earnings: What's in the Cards?).
AIZ’s earnings surpassed estimates in each of the last four reported quarters, the average surprise being 18.06%. This is depicted in the chart below:
Prudential: Group Insurance segment is likely to be affected by lower net underwriting results and higher expenses. U.S. Legacy Products segment is likely to be affected by lower fee income, underwriting results and net investment spread results. The Retirement business is likely to have benefited from higher net investment spread results, partially offset by higher expenses and less favorable reserve experience. Individual Life is likely to have benefited from higher underwriting results and net investment spread results. PGIM is likely to have benefited from higher net asset management fees and higher net other related revenues.
The Zacks Consensus Estimate for the bottom line is pegged at $3.42, indicating a 4.4% decrease from the year-ago quarter’s reported figure. The company has an Earnings ESP of -0.85% and a Zacks Rank #3 at present. (Read more: Will Prudential Financial Pull Off a Surprise This Earnings Season?).
PRU’s earnings surpassed estimates in three of the last four quarters while missing in one, the average surprise being 9.32%. This is depicted in the chart below:
American Financial: The second-quarter results are likely to benefit from strong performance across Property and transportation, Specialty casualty, Specialty financial and other specialty businesses. New business opportunities, a favorable renewal environment and higher exposures in several lines are likely to favor results. Higher reinvestment yields and a larger invested asset base are likely to boost core investment income. However, exposure to cat losses and rising expenses are likely to have weighed on profitability.
The Zacks Consensus Estimate for AFG’s bottom line is pegged at $2.41, indicating a 12.6% increase from the year-ago quarter's reported figure. The company has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present.
AFG’s earnings surpassed estimates in three of the last four quarters while missing in one, the average surprise being 7.25%. This is depicted in the chart below:
American Financial Group, Inc. Price and EPS Surprise
View the Zacks #1 Rank List
Image: Bigstock
Watch These 4 Insurance Stocks for Q2 Earnings: Beat or Miss?
Key Takeaways
Continued improved pricing, exposure growth, portfolio streamlining, solid retention, renewals, reinsurance agreements and accelerated digitalization are expected to have enhanced insurance stocks’ June-quarter performance. However, catastrophe losses are likely to have weighed on the upside. Insurers yet to report their second-quarter results on Aug. 4 are Mercury General Corporation (MCY - Free Report) , Assurant, Inc. (AIZ - Free Report) , Prudential Financial, Inc. (PRU - Free Report) and American Financial Group, Inc. (AFG - Free Report) .
The insurance space is housed within the broader Finance sector (one of the 16 broad Zacks sectors within the Zacks Industry classification). Per the latest Earnings Preview, the total earnings of finance companies for the second quarter are anticipated to rise 22.9% from the prior-year quarter’s figure. These companies’ revenues are anticipated to improve 12%.
Factors Likely to Shape Insurers’ Performance in Q2
Better pricing, solid retention and exposure growth across business lines are likely to have driven premiums. Per the latest Marsh Global Insurance Market Index, in the second quarter of 2026, Global insurance rates declined 6%, marking the eighth consecutive quarter of reductions and extending favorable conditions for buyers across most regions and major product lines. Property rates reduced by 12% while casualty rates increased 2%, driven largely by continued challenges in the United States.
Aon has estimated a pre-tax catastrophe loss of $1.72 billion, indicating a heavy start for the annual aggregate year for the company’s catastrophe bonds. Goldman Sachs estimates global insured catastrophe losses at approximately $24 billion. Per Goldman Sachs, the estimate of $24 billion represents approximately 65-70% of the five-year quarterly average.
Underwriting profit is likely to have benefited from better pricing, reinsurance arrangements, portfolio repositioning, reinsurance covers and favorable reserve development.
Auto premiums are likely to have improved, given increased travel across the world.
The U.S. Federal Reserve projected to hold the federal funds rate steady in the 3.50% to 3.75% range through the end of 2026. For year-end 2026, the Fed projected one quarter-point rate hike and five projected half-point rate hikes.
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 second 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 instills confidence in the insurers.
Let’s find out how the following insurers are placed before their second-quarter 2026 results on Aug. 4.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Per our proprietary model, the combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Mercury General: Mercury General's second-quarter results are likely to benefit from continued growth in net premiums earned, driven by previously approved rate increases, disciplined underwriting and an increase in policies written, particularly in the California private passenger automobile business. Rate increases in the California homeowners line are also expected to have supported earned premiums. Net investment income is expected to have increased, supported by higher reinvestment yields and growth in invested assets amid a favorable interest rate environment. Disciplined underwriting, favorable pricing actions and prior-year reserve development are expected to have supported underwriting profitability and the combined ratio.
The Zacks Consensus Estimate for the bottom line is pegged at $1.80, indicating a 32.58% decrease from the year-ago quarter’s reported figure. The company has an Earnings ESP of 0.00% and a Zacks Rank #2 at present. (Read more: Mercury General Set to Report Q2 Earnings: What to Expect?). You can see the complete list of today’s Zacks #1 Rank stocks here.
MCY’s earnings surpassed estimates in each of the last four reported quarters, the average surprise being 61.76%. This is depicted in the chart below:
Mercury General Corporation Price and EPS Surprise
Mercury General Corporation price-eps-surprise | Mercury General Corporation Quote
Assurant: Solid performance in the Global Housing segment, as well as growth in Global Lifestyle, is likely to have aided Assurant's second-quarter performance. Revenues are likely to have increased due to improved net earned premiums and higher net investment income. Net earned premiums are expected to have benefited from higher premiums in the Global Housing and Global Lifestyle segments.
Global Housing is expected to have been driven by Homeowners from higher lender-placed policies in force and average premiums and growth across various specialty products, as well as growth in Renters and Other, primarily from the prior year acquisition of a block of renters policies. Global Lifestyle is likely to have benefited from Connected Living growth from global mobile device protection programs, extended service contracts, including a recently launched U.S. program, and card benefits programs in financial services.
The Zacks Consensus Estimate for the bottom line is pegged at $5.16, indicating a 7.1% decrease from the year-ago quarter’s reported figure. The company has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. (Read more: Assurant Set to Report Q2 Earnings: What's in the Cards?).
AIZ’s earnings surpassed estimates in each of the last four reported quarters, the average surprise being 18.06%. This is depicted in the chart below:
Assurant, Inc. Price and EPS Surprise
Assurant, Inc. price-eps-surprise | Assurant, Inc. Quote
Prudential: Group Insurance segment is likely to be affected by lower net underwriting results and higher expenses. U.S. Legacy Products segment is likely to be affected by lower fee income, underwriting results and net investment spread results. The Retirement business is likely to have benefited from higher net investment spread results, partially offset by higher expenses and less favorable reserve experience. Individual Life is likely to have benefited from higher underwriting results and net investment spread results. PGIM is likely to have benefited from higher net asset management fees and higher net other related revenues.
The Zacks Consensus Estimate for the bottom line is pegged at $3.42, indicating a 4.4% decrease from the year-ago quarter’s reported figure. The company has an Earnings ESP of -0.85% and a Zacks Rank #3 at present. (Read more: Will Prudential Financial Pull Off a Surprise This Earnings Season?).
PRU’s earnings surpassed estimates in three of the last four quarters while missing in one, the average surprise being 9.32%. This is depicted in the chart below:
Prudential Financial, Inc. Price and EPS Surprise
Prudential Financial, Inc. price-eps-surprise | Prudential Financial, Inc. Quote
American Financial: The second-quarter results are likely to benefit from strong performance across Property and transportation, Specialty casualty, Specialty financial and other specialty businesses. New business opportunities, a favorable renewal environment and higher exposures in several lines are likely to favor results. Higher reinvestment yields and a larger invested asset base are likely to boost core investment income. However, exposure to cat losses and rising expenses are likely to have weighed on profitability.
The Zacks Consensus Estimate for AFG’s bottom line is pegged at $2.41, indicating a 12.6% increase from the year-ago quarter's reported figure. The company has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present.
AFG’s earnings surpassed estimates in three of the last four quarters while missing in one, the average surprise being 7.25%. This is depicted in the chart below:
American Financial Group, Inc. Price and EPS Surprise
American Financial Group, Inc. price-eps-surprise | American Financial Group, Inc. Quote