The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how property & casualty insurance stocks fared in Q2, starting with Travelers (NYSE: TRV).

Property & Casualty (P&C) insurers protect individuals and businesses against financial loss from damage to property or from legal liability. This is a cyclical industry, and the sector benefits when there is 'hard market', characterized by strong premium rate increases that outpace loss and cost inflation, resulting in robust underwriting margins. The opposite is true in a 'soft market'. Interest rates also matter, as they determine the yields earned on fixed-income portfolios. On the other hand, P&C insurers face a major secular headwind from the increasing frequency and severity of catastrophe losses due to climate change. Furthermore, the liability side of the business is pressured by 'social inflation'—the trend of rising litigation costs and larger jury awards.

The 33 property & casualty insurance stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.5%.

In light of this news, share prices of the companies have held steady as they are up 4.7% on average since the latest earnings results.

Travelers (NYSE: TRV)

Tracing its roots back to 1853 when it insured travelers against accidents on steamboats and railroads, Travelers (NYSE: TRV) provides a wide range of commercial and personal property and casualty insurance products to businesses, government units, associations, and individuals.

Travelers reported revenues of $12.11 billion, up 7.3% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a beat of analysts’ EPS estimates but a significant miss of analysts’ book value per share estimates.

Interestingly, the stock is up 9% since reporting and currently trades at $274.90.

Is now the time to buy Travelers? Access our full analysis of the earnings results here, it’s free.

Best Q2: Root (NASDAQ: ROOT)

Pioneering a data-driven approach that rewards good driving habits, Root (NASDAQ: ROOT) is a technology-driven auto insurance company that uses mobile apps to acquire customers and data science to price policies based on individual driving behavior.

Root reported revenues of $382.9 million, up 32.4% year on year, outperforming analysts’ expectations by 7.5%. The business had an incredible quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ net premiums earned estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 27.8% since reporting. It currently trades at $88.87.

Is now the time to buy Root? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Selective Insurance Group (NASDAQ: SIGI)

Founded in 1926 during the early days of automobile insurance, Selective Insurance Group (NASDAQ: SIGI) is a property and casualty insurance company that sells commercial, personal, and excess and surplus lines insurance products through independent agents.

Selective Insurance Group reported revenues of $127.9 million, down 89.3% year on year, falling short of analysts’ expectations by 90.3%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates and a significant miss of analysts’ book value per share estimates.

Selective Insurance Group delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 13.7% since the results and currently trades at $78.11.

Read our full analysis of Selective Insurance Group’s results here.

American Financial Group (NYSE: AFG)

With roots dating back to 1872 and a business model that empowers local decision-making, American Financial Group (NYSE: AFG) is an insurance holding company that specializes in commercial property and casualty insurance products for businesses through its Great American Insurance Group.

American Financial Group reported revenues of $1.81 billion, up 3% year on year. This print came in 4.5% below analysts' expectations. Overall, it was a disappointing quarter as it also produced a significant miss of analysts’ net premiums earned estimates and a significant miss of analysts’ book value per share estimates.

The stock is up 7% since reporting and currently trades at $133.06.

Read our full, actionable report on American Financial Group here, it’s free.

RLI (NYSE: RLI)

Founded in 1965 and named after its original focus on "replacement lens insurance" for contact lens wearers, RLI (NYSE: RLI) is a specialty insurance company that underwrites property, casualty, and surety products through wholesale brokers, independent agents, and carrier partnerships.

RLI reported revenues of $499.8 million, up 20% year on year. This result beat analysts’ expectations by 11.7%. More broadly, it was a mixed quarter as it also logged a beat of analysts’ EPS estimates but a significant miss of analysts’ book value per share estimates.

The stock is down 1.3% since reporting and currently trades at $68.40.

Read our full, actionable report on RLI here, it’s free.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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