As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the property & casualty insurance industry, including Selective Insurance Group (NASDAQ: SIGI) 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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.8%.

In light of this news, share prices of the companies have held steady as they are up 1.5% on average since the latest earnings results.

Weakest Q3: 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 $138.7 million. This print fell short of analysts’ expectations. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ revenue estimates and a significant miss of analysts’ EPS estimates.

“Our full-year combined ratio outlook remains at 97 to 98%. With a 98.3% combined ratio through the first nine months of the year and strong net investment income, we delivered year-to-date operating ROE of 12.6%,” said John J. Marchioni, Chairman, President and Chief Executive Officer.

Selective Insurance Group delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 4.2% since reporting and currently trades at $77.76.

Read our full report on Selective Insurance Group here, it’s free for active Edge members.

Best Q3: 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 $387.8 million, up 26.9% year on year, outperforming analysts’ expectations by 4.5%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive 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 14.4% since reporting. It currently trades at $76.66.

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

Progressive (NYSE: PGR)

Starting as a small auto insurance company in 1937 with a pioneering focus on high-risk drivers, Progressive (NYSE: PGR) is a major auto, property, and commercial insurance provider that offers policies through independent agents, online platforms, and over the phone.

Progressive reported revenues of $22.51 billion, up 14.2% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ book value per share estimates.

As expected, the stock is down 6.4% since the results and currently trades at $225.10.

Read our full analysis of Progressive’s results here.

CNA Financial (NYSE: CNA)

With roots dating back to 1853 and majority ownership by Loews Corporation, CNA Financial (NYSE: CNA) is a commercial property and casualty insurance provider offering coverage for businesses, including professional liability, surety bonds, and specialized risk management services.

CNA Financial reported revenues of $3.82 billion, up 5.5% year on year. This print met analysts’ expectations. It was a very strong quarter as it also put up a beat of analysts’ EPS estimates and revenue in line with analysts’ estimates.

The stock is up 2.7% since reporting and currently trades at $45.75.

Read our full, actionable report on CNA Financial here, it’s free for active Edge members.

Essent Group (NYSE: ESNT)

Serving as a crucial bridge between homebuyers and the American dream of homeownership, Essent Group (NYSE: ESNT) provides private mortgage insurance and title services that enable lenders to offer home loans with down payments of less than 20%.

Essent Group reported revenues of $311.8 million, down 1.5% year on year. This number missed analysts’ expectations by 1.6%. It was a softer quarter as it also recorded a significant miss of analysts’ EPS estimates and a miss of analysts’ revenue estimates.

The stock is down 1% since reporting and currently trades at $60.17.

Read our full, actionable report on Essent Group here, it’s free for active Edge members.

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.

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