As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the property & casualty insurance industry, including Radian Group (NYSE: RDN) and its peers.
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 4.6% on average since the latest earnings results.
Radian Group (NYSE: RDN)
Founded during the housing boom of 1977 and weathering multiple real estate cycles since, Radian Group (NYSE: RDN) provides mortgage insurance and real estate services, helping lenders manage risk and homebuyers achieve affordable homeownership.
Radian Group reported revenues of $318 million, flat year on year. This print fell short of analysts’ expectations by 1.9%. Overall, it was a slower quarter for the company with a slight miss of analysts’ net premiums earned estimates and a narrow beat of analysts’ EPS estimates.
“We reported strong performance for Radian in the second quarter, increasing book value per share by 12% year-over-year, generating net income of $142 million and delivering a return on equity of 12.5%. Our primary mortgage insurance in force, a key driver of future earnings for our company, grew to another all-time high of $277 billion,” said Radian’s Chief Executive Officer Rick Thornberry.
Interestingly, the stock is up 10.7% since reporting and currently trades at $37.16.
Read our full report on Radian Group 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 and 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 25.3% since reporting. It currently trades at $91.95.
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 and 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 12.3% since the results and currently trades at $79.34.
Read our full analysis of Selective Insurance Group’s results here.
Assured Guaranty (NYSE: AGO)
Serving as a financial safety net for over $11 trillion in debt service payments since its founding in 2003, Assured Guaranty (NYSE: AGO) provides credit protection products that guarantee scheduled payments on municipal bonds, infrastructure projects, and structured finance obligations.
Assured Guaranty reported revenues of $281 million, up 39.1% year on year. This print beat analysts’ expectations by 51.2%. Taking a step back, it was a softer quarter as it recorded a significant miss of analysts’ EPS and net premiums earned estimates.
Assured Guaranty scored the biggest analyst estimates beat among its peers. The stock is flat since reporting and currently trades at $84.10.
Read our full, actionable report on Assured Guaranty here, it’s free.
HCI Group (NYSE: HCI)
Starting as a Florida "take-out" insurer that assumed policies from the state-backed Citizens Property Insurance Corporation, HCI Group (NYSE: HCI) provides property and casualty insurance, primarily homeowners coverage, while leveraging proprietary technology to improve underwriting and claims processing.
HCI Group reported revenues of $221.9 million, up 7.6% year on year. This result surpassed analysts’ expectations by 1.1%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ book value per share estimates and a beat of analysts’ EPS estimates.
The stock is up 35.5% since reporting and currently trades at $186.82.
Read our full, actionable report on HCI Group here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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