The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Radian Group (NYSE:RDN) and the rest of the property & casualty insurance stocks fared in Q3.
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 15.1%.
In light of this news, share prices of the companies have held steady as they are up 2.1% 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 $310.6 million, down 8.4% year on year. This print fell short of analysts’ expectations by 2.1%. Overall, it was a slower quarter for the company with a miss of analysts’ revenue estimates.
“We delivered excellent financial results during the quarter and announced our plans to strategically transform Radian into a global, multi-line specialty insurer,” said Radian’s Chief Executive Officer Rick Thornberry.
Interestingly, the stock is up 3.5% since reporting and currently trades at $35.52.
Read our full report on Radian 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 6.7% since reporting. It currently trades at $83.46.
Is now the time to buy Root? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: 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 7.4% since the results and currently trades at $222.72.
Read our full analysis of Progressive’s results here.
Cincinnati Financial (NASDAQ:CINF)
Founded in 1950 by independent insurance agents seeking stable market options for their clients, Cincinnati Financial (NASDAQ:CINF) provides property casualty insurance, life insurance, and related financial services through independent agencies across 46 states.
Cincinnati Financial reported revenues of $2.87 billion, up 12.1% year on year. This result was in line with analysts’ expectations. Overall, it was an exceptional quarter as it also logged a solid beat of analysts’ book value per share estimates and a beat of analysts’ EPS estimates.
The stock is up 3.1% since reporting and currently trades at $162.55.
Read our full, actionable report on Cincinnati Financial here, it’s free for active Edge members.
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 $1.36 billion, up 9.3% year on year. This number surpassed analysts’ expectations by 364%. Zooming out, it was a softer quarter as it recorded a significant miss of analysts’ EPS estimates and a significant miss of analysts’ book value per share estimates.
Selective Insurance Group achieved the biggest analyst estimates beat among its peers. The stock is down 2.9% since reporting and currently trades at $78.80.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.